Ambiguity Effect

Want to learn about the Ambiguity Effect? This is the Page for you. Jump around using our Table of Contents

• Definitions
• Example #1
• Example #2
• Example #3
• How to apply to your business

Definitions:

Book Definition: a cognitive bias where decision making is affected by a lack of information

Our Take-away: implies that people tend to select options for which the probability of a favorable outcome is known, over an option for which the probability of a favorable outcome is unknown

Ambiguity Effect Example #1:

Have you ever been ordering something, then always thinking they’re gonna upcharge you at checkout? Or there’s some hidden fee? By displaying the final price earlier in the buying process, you may see a drop off of  people continuing. But the  people who proceed have a significant interest in buying.

This is something we strongly encourage you to test in your buying process!

Ambiguity Effect Example #2:

If you were presented with these two choices, where are you going? The left side may have a much lower risk… But it can also, be higher to substantially higher then  50%

If you can tell people the uncertainty beforehand they will be comfortable, as they can mentally prepare for the types of problems before and work to resolve them. Easing their worries..

If you don’t tell them, they have no idea on how much to worry. Will it be better or harder?? More people will prefer the comfort over the unknown

Ambiguity Effect Example #3:

The biggest thing in tech is privacy! And whether we like to trust these social media platforms or not. By showing a prospective user that you cherish their privacy makes them trust you slightly. As they know exactly where you stand on privacy and how their information will be used

How to Apply this to your business:

With the examples above you might be getting some ideas already, but here are some of ours:

• Give more information – Maybe not all up front, but have a place for potential clients to browse

A Lot of the application from this bias is just to give more information in order to make people more comfortable. You don’t want to give too much as it may make people want to “Think it over”

Doing this also has the side effect of making you seem more like a professional in your field

Conclusion:

You’ve seen a few examples along with some definitions and ways to apply this to your business. Have you learned anything? If so leave a reply below to let us know!

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