Risky Business: The Negative Impact of Ambiguity on Risk Communications

Consumer information presents risks in several formats; for example, using absolute risk estimates such as 10% or ranges such as 5-15%. While these two sets of statistical likelihoods might appear similar, do they convey the same meaning to the consumers who read them? Given both are commonly used, a greater understanding of their differential impact on behaviour is warranted. Risk is “a negatively-valenced assessment that an unfavorable event will occur” (Menon, Raghubir, and Agrawal 2008, p. 981) and involves some degree of uncertainty (Conchar et al. 2004). Laypeople base risk estimates on two key dimensions; namely, the degree to which risks are perceived as uncontrollable and the degree to which they are perceived as uncertain or unknown (Fischhoff et al. 1978; Slovic 1987). Risks viewed as less controllable or less certain are judged as more severe, and reframing a risk as less controllable increases risk estimates (Lin, Lin, and Raghubir 2003).