Reflexive Positivity: How Uncertainty Can Improve Promotions

When should retailers offer promotions with uncertain rewards? The current research investigates this question and finds there are instances when uncertain promotions seem more attractive then their expected value. For example, a lottery between small and large rewards may even be as attractive as the large reward for certain. We demonstrate this effect in hypothetical scenarios as well as a field experiment involving actual purchases. We suggest that this effect occurs because consumers exhibit reflexive positivity - reflexively viewing the lottery better than its expected value. This underlying psychological mechanism outlines boundary conditions for this positive effect that have direct practical implications for marketers.