Ask Ariely: On Unraveling Uncertainty and Translating Transparency

January 29, 2022 BY Dan Ariely

Here’s my Q&A column from the WSJ this week  and if you have any questions for me, you can tweet them to @danariely with the hashtag #askariely, post a comment on my Ask Ariely Facebook page, or email them to AskAriely@wsj.com.


Dear Dan,

I play the lottery every week even though I know that the chances of winning are extremely small. Why do so many of us persist in doing this?


One reason that the lottery is so popular is that it provides uncertainty in a way that is appealing. We don’t normally like uncertainty: Not knowing if or when the pandemic is going to end, or whether to prepare for a winter storm, or what to do about climate change can foster a feeling of helplessness and decrease our motivation to act. But uncertainty about low-probability rewards can make us work harder.

In an experiment, participants were asked to drink six cups of water in two minutes. This is not easy to do. Half of the participants were told they would receive a certain reward ($2) if they achieved the goal, while the other half were told that if they succeeded, they’d receive either $1 or $2, to be determined by a coin toss after they’d finished. More participants in the second group managed to drink all six cups than in the first, suggesting that the uncertain reward was particularly motivating.
The same thing might be happening with the lottery. We get value from the uncertainty of winning, which piques our curiosity and stimulates our fantasies. We also get a psychological reward from seeing the uncertainty resolved, even though we are usually disappointed that the winning ticket wasn’t ours.
All the same, despite this minor benefit from the lottery, I’d recommend that you find other ways to improve your well-being.


Dear Dan,

I own a small pet-sitting business and pay my employees a living wage—one that accounts for the real cost of food and shelter, which the minimum wage does not. Consequently, our prices are a little higher than those of our competitors, and I’m worried about finding and keeping clients. Do I need to rethink my business model?


People are willing to pay higher prices when vendors are transparent about their operating costs. In your case, this means letting your clients know about your commitment to paying a living wage. I suspect that many will respond positively, and some of them will be willing to pay more for your services when they understand that they are supporting this business model. I recommend that you highlight your commitment in your marketing materials and social media, as well as on your invoices.

The benefit of cost transparency has been documented through studies. An online retailer conducted an inadvertent experiment when it posted an infographic on its website showing the cost of producing wallets. By accident, the retailer only showed the infographic for some wallet colors. The result was that sales of wallets with the infographic increased by 22% compared to those of wallets without.

In a more deliberate study, researchers posted different signs near the chicken noodle soup at a university dining hall—one listing the soup ingredients, the other breaking down the costs of making the soup. Customers were 21.1% more likely to buy the soup next to the second sign.
Voluntary transparency about costs fills customers in about what they’re paying and also signals trustworthiness on the part of the vendor.

See the original article in the Wall Street Journal.