Certainty Effect
Outcomes that are certain get more weight than their probability warrants, and something presented as certain — 'guaranteed', 'risk-free' — can be sold at a premium even when the guarantee is thin.
An everyday example
Paying extra for a 'guaranteed' return that turns out to be guaranteed only under conditions on page nine.
What it can cost you
Over-paying for the word 'certain'; pseudo-certainty from partial framing.
Warning signs
- I relaxed at the word guaranteed.
- I did not read what voids it.
One thing to do
Ask what exactly is guaranteed, by whom, and what voids it; price the guarantee by its exceptions.
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