When Goods Were Odds: Do People Evaluate the Same Option Differently If it Was Previously Uncertain?
60 Pages Posted: 16 Mar 2023
Date Written: March 15, 2023
Though consumers frequently face uncertainty, much of that uncertainty is eventually resolved (e.g., a person entered in a raffle eventually learns what prize they have received). How do people evaluate options (e.g., prizes) that result from uncertainty (e.g., an uncertain raffle)? Seven experiments (N = 10,956) reveal that people keep goods more often when they stem from uncertain prospects compared to when the same goods were always known. This effect emerged with an incentive-compatible decision (Study 1), a stock-trading scenario (Study 2), and choices between gambles and cash (Study 3). We propose this effect arises because goods resulting from uncertainty induce a perception of “winning” those outcomes (Study 4). Supporting this account, when people received the worst possible outcome from uncertainty, the effect was attenuated (Study 5). Further, when people instead obtained a monetary loss, the pattern reversed: People were less likely to hold onto a previously uncertain (versus always certain) loss (Study 6). Lastly, this effect carried over to products associated with the previously uncertain good (a subscription with a previously uncertain free trial; Study 7). These findings demonstrate that the influence of uncertainty persists even after its resolution, affecting how (sure) options resulting from uncertainty are evaluated.
Keywords: uncertainty, uncertainty resolution, preference, value, risky prospects, pre-registered, open data, open materials
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