Ambiguity Bias: Why We Choose the Devil We Know

The Comfort of Known Risk

Imagine two urns. The first contains 50 red balls and 50 blue balls. The second contains 100 balls, but you do not know the ratio of red to blue. You win a prize if you draw a red ball. Which urn do you pick from?

Most people choose the first urn, even though the expected probability of drawing red is mathematically identical in both. The second urn might have 90 red balls. It might have 10. The uncertainty itself feels threatening, so people avoid it. This is ambiguity bias, also known as the Ellsberg paradox after the researcher who first demonstrated it in 1961.

Ambiguity bias is the tendency to prefer options where the probability of a favorable outcome is known over options where the probability is unknown, even when the unknown option might be objectively better. It is not about avoiding risk. It is about avoiding uncertainty. We would rather accept a known disadvantage than face an unknown possibility.

Where Ambiguity Bias Holds People Back

Career decisions. Staying in a job you dislike because you know exactly what it is, even when a new opportunity could be significantly better, is one of the most common manifestations of ambiguity bias. The current job has known downsides: a difficult manager, limited growth, mediocre pay. But those downsides are familiar and predictable. The new role has unknown variables, and that ambiguity makes it feel riskier than it actually is. People routinely choose certain dissatisfaction over uncertain improvement.

Technology adoption. Businesses frequently resist adopting new tools or systems because the benefits are uncertain, even when their current systems are clearly inadequate. The legacy software crashes regularly and wastes hours every week, but at least everyone knows its quirks. The new platform might solve those problems or it might introduce new ones. Ambiguity bias favors the familiar frustration over the unfamiliar potential. This is why technology transitions are so difficult in organizations, even when the evidence strongly favors the change.

Investment behavior. Investors exhibit strong home-country bias, heavily favoring domestic stocks over international ones. This is partly ambiguity bias: domestic markets feel more knowable, even when international diversification would reduce overall portfolio risk. Similarly, people often stick with savings accounts earning minimal interest rather than investing in index funds because the range of possible outcomes in the market feels too uncertain, even though long-term historical data strongly supports diversified investing.

Dating and relationships. People sometimes stay in relationships that are merely comfortable rather than pursuing connections that could be deeply fulfilling but carry uncertainty. The fear of the unknown, of vulnerability, of not knowing how a new relationship might unfold, keeps people in situations where they already know the ceiling is low. Ambiguity bias whispers that a predictable mediocrity is safer than an unpredictable possibility.

The greatest opportunities in life rarely come with a clearly labeled probability. If you only choose when the odds are spelled out, you are selecting from a very narrow menu.

Why Uncertainty Feels Like Danger

From an evolutionary perspective, ambiguity aversion makes sense. In ancestral environments, unknown situations often were genuinely dangerous. An unfamiliar path might contain predators. A new food source might be poisonous. Sticking with what you knew was a reasonable survival strategy when the consequences of getting it wrong were death.

But modern decisions rarely carry those stakes. Trying a new career path will not kill you. Adopting a new software platform will not end your company overnight. Yet our brains process ambiguity with the same neural machinery that once evaluated physical threats. Brain imaging studies show that ambiguous situations activate the amygdala more than merely risky ones. Your brain literally treats "I don't know the odds" as more alarming than "I know the odds are bad."

This means ambiguity bias is not a rational calculation. It is an emotional reaction dressed up as prudence. When someone says "I just want to play it safe," they often mean "I want to avoid the discomfort of not knowing," which is a very different thing.

Signs You Might Have Ambiguity Bias

• You consistently choose familiar options over new ones, even when you are unsatisfied with the familiar option
• You spend excessive time researching before making decisions, trying to eliminate all uncertainty rather than accepting reasonable unknowns
• You frame unknown situations as "risky" even when there is no specific evidence of risk, just absence of complete information
• You feel more comfortable with a guaranteed small reward than a possible large reward, even when the expected value strongly favors the uncertain option
• You often use phrases like "better the devil you know" or "why fix what isn't broken" to justify staying in unsatisfying situations
• You avoid trying new restaurants, routes, hobbies, or social situations because the outcome is unpredictable

Learning to Move Through the Unknown

Overcoming ambiguity bias does not mean becoming reckless. It means developing a more honest relationship with uncertainty. The first step is recognizing that most decisions in life involve ambiguity. Waiting for complete information is itself a choice, and it is often the most costly one because opportunities rarely wait.

One practical technique is to separate risk from ambiguity explicitly. When facing a decision, ask yourself: am I avoiding this because I have evidence it will go badly, or because I simply do not know how it will go? If the answer is the latter, ambiguity bias is likely driving your hesitation rather than genuine risk assessment.

Small experiments are powerful antidotes. Instead of committing fully to the unknown option, find ways to test it. Take a freelance project before leaving your job. Try the new software with one team before rolling it out company-wide. Go on a first date without deciding whether this person is your future partner. Small experiments convert ambiguity into data, and once you have data, the decision becomes clearer.