ambiguity effect

The ambiguity effect is a psychological tendency where people prefer options with known risks over those with unknown or unclear risks. When choices involve uncertain outcomes, individuals often choose the familiar or safer alternative, avoiding options where information is incomplete or ambiguous. This effect can influence decision-making in various areas, such as investing or consumer choices, leading people to avoid options that seem vague or uncertain, even if those options might potentially offer better rewards. Essentially, people prefer clarity and transparency over ambiguity to feel more confident in their decisions.