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Pseudocertainty effect
Description
The tendency for people to perceive an outcome as certain when it is actually uncertain in multi-stage decision making.
Pseudocertainty effect in business decision
A business might choose a strategy that guarantees a small positive outcome in an initial phase, making them feel certain of overall success, even if subsequent phases carry significant, unaddressed risks.
Pseudocertainty effect in personal life decision
You choose a certain $900 gain over a 90% chance of $1,000, even though the expected value is the same.