Aversion to Ambiguity
This bias describes a preference for choices with known probabilities over those with unknown probabilities, regardless of the expected value of each.
Industrial projects
Investment 1: If an industrial project A is successful, you will earn €1.2 million. If the project is not successful, you get your money back. You do not lose or win anything. You have no information about the chance of success of the project.
Investment 2: If an industrial project B is successful, you have 50% chance to reach a profitability of €1 million. On the other hand, there is a 50% chance that the project is not successful, in which case you will get your money back, similarly to investment 1. You do not lose or win anything.
Most people will take the option of Investment 2, because we generally prefer knowing the likelihood of success (i.e. have some control), even if that leads to a smaller profit margin.
Example 2: Garden tools
Preferring a 4-star rated (mediocre) hand pruner for the garden that has many reviews, over one that has no reviews at all, even if the latter might be better.
Also relates to: Familiarity · Loss Aversion · Diminishing Sensitivity