Alternative Outcomes Effect

The alternative outcomes effect is a skewed perception that occurs when people's belief about the probability of an outcome changes depending on how other possible outcomes are distributed, even if the chances stay the same.

For example, imagine you are competing in a raffle in which only 20 tickets were sold. You are only allowed to purchase 5 tickets. Hypothetically, you could choose to enter the raffle in one of two conditions: you having 5 tickets and 5 other people having 3 tickets each OR you having 5 tickets with only one other person having 15 tickets. Although your chances of winning are the same in either condition, most people would chose to enter the one with only one other person. This is the alternative outcomes effect. The perceptual likelihood of winning changes depending on how alternative outcomes are distributed.

So the perception that you are going to win the raffle is greater if competing against only one other person than if you were up against 5 other people. Although the probability of your win is the same (you only have 5 tickets!) it just seems as if winning is more certain when competing against one person.

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