The Power of Uncertainty
Studies show that when a decision's outcome is uncertain, people act more risk averse than the situation truly merits. This could spell trouble for our uncertain economic times.
The fear of uncertainty can have profound consequences on human decision-making. … One can easily imagine a similar bias at work in the current economy. Because every decision is shaded with uncertainty—nobody knows what will happen, and those who pretend to know what will happen disagree—we discount the value of expected rewards. The hint of risk triggered the amygdala, and that aversive feeling made us less interested in shopping at Barnes and Noble, even when we were getting a guaranteed gift certificate. This the curse of uncertainty: it makes everything feel unappealing.
