Certainty Effect

The Certainty Effect is a concept in decision-making behavior where people tend to prefer options that guarantee a positive outcome over those with a higher chance of a similar, but less certain, result. For example, individuals might choose a sure $50 over a gamble that offers a 50% chance of $100, even though the gamble has a higher expected value. This effect highlights that people often overvalue certainty, sometimes leading to choices that are not necessarily rational from a purely mathematical perspective, reflecting a bias toward avoiding risk when a guaranteed reward is available.