Ambiguity aversion

Research. An urn contains 90 balls, in which 30 are known to be red, and the remaining 60 are either black or yellow. A ball is drawn from the urn and participants can choose one of two gambles:

Option A - You get $100 if the ball is red / Option B - You get $100 if the ball is black

Most people choose Option A over Option B in the gambles listed above. This experiment was instrumental in demonstrating our preference for the known over the unknown.

Ellsberg (1961). Risk, Ambiguity, and the Savage Axioms

"Better the devil you know than the devil you don't."

Case study. As advertising legend Rory Sutherland explains, the London Underground saw their biggest improvement in customer satisfaction after introducing the dot matrix display boards at the platform. Knowing that a train was late, but still going to show up, significantly reduced commuters’ anxiety caused by unexpected delays.

Thought starters.

» Show your audience what to expect when making a choice » Give timely information across the customer journey » Provide a channel for questions when there is high uncertainty