Ambiguity Effect

When you make decisions, a lack of information (ambiguity) can affect you. People tend to avoid options where the outcome seems unknown. Instead, they favor choices that seem more predictable. For example, investors tend to put their money into predictable but lower return assets like government bonds instead of the potentially higher-return but uncertain stock market. It’s very human to dislike uncertainty.

How To Avoid It

Since the effect is based on a lack of information, figure out what pieces you’re missing and try to fill that gap. When the time comes to make a call, take a step back and judge all options more balanced.