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Leveling And Sharpening: Definition, Examples and Effects

The Pseudocertainty Effect is a phenomenon that occurs when people overestimate the likelihood of an event occurring due to a false sense of security. This effect can have a significant impact on decision-making and can lead to poor outcomes.


Definition: The Pseudocertainty Effect is a cognitive bias that occurs when people overestimate the likelihood of an event occurring due to a false sense of security. This false sense of security is often based on a lack of information or a misunderstanding of the situation. This effect can lead to people making decisions that are not in their best interest.


Examples: One example of the Pseudocertainty Effect is when people overestimate the likelihood of winning a lottery. People may think that they have a better chance of winning than they actually do because they don’t understand the odds. Another example is when people overestimate the likelihood of a stock market investment paying off. People may think that the stock market is a sure thing, when in reality it is a risky investment.


Effects: The Pseudocertainty Effect can have a significant impact on decision-making. People may make decisions that are not in their best interest because they overestimate the likelihood of a positive outcome. This can lead to people taking unnecessary risks or investing in things that are not likely to pay off. Additionally, the Pseudocertainty Effect can lead to people feeling disappointed or frustrated when their expectations are not met.


Do you want to expand your knowledge on this topic? Read our full in-depth article on cognitive biases.


Do you have extra 15 minutes today? Takeour fun and interactive quiz to learn which of 16 reasoning styles you use, your overall level of rationality, and what you can do now to improve your rationality skills.

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