Ambiguity Effect makes us buy branded items
People are more likely to love brands like Puma, Adidas, Apple, Jaguar, Nike, etc. Why we choose only branded from billions of items that may be fashion, electronics or any other things? All the complexity is with our mind. Ambiguity Effect explains reason behind it.
Ambiguity Effect
According to Ambiguity Effect our mind discards uncertainties in different choices and choose the items whose probabilities already are known. In simple words if you have two choices where result of one choice is predicted by you and other one is strange for you or you don't what will be the result. In this situation our mind choose first choice which is familiar to it and neglect the other one. This effect was explained by Daniel Ellsberg. It is a cognitive bias for decision making.
Example
There are many examples of Ambiguity Effect like shopping, football team choosing, interview for new job, etc. In all these examples selection is based on Ambiguity Effect. Consider a girl is going to participate in dancing competition. She knows all her local competitors. She also knows all their plus and minus points. So, she can predict how much will be competition level and its result. But if she goes to different state she might not be knowing about them. Therefore she will prefer to participate in her locality.
Importance
This effect is useful at every places because it avoids weak decisions with uncertainties and makes more reliable and comfortable decision. It is also used in business to make more powerful decisions.
Reference: Daniel Ellsberg
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