How consumers assess risk and probabilities using uncertain promotions

Abstract

Consumers are often confronted with making decisions that may be dependent on the likelihood of a future outcome. This literature review will discuss how consumers perceive risk in the context of marketing practices. It will also explore the following four drivers of consumers’ behavior within the previously stated context: (1) certainty effect (2) reinforcing-uncertainty effect (3) innate optimism (4) anchoring. This review hopes to assist both marketers and consumers in improving their judgment and decision making abilities when faced with uncertainty. Previous research has also concluded that uncertainty can potentially drive repetition which will be further explored to potentially reveal the effectiveness of such promotional tactics.