Pseudocertainty effect
The tendency to treat an outcome as certain when it is only certain within one stage of a multi-stage situation. We overvalue options that remove risk at one step, even when the overall result is still uncertain.
In everyday life
A contest promises that anyone who reaches the final round wins a prize, and entrants plan around the prize as a sure thing, though most never reach the final.
Your contract promises a guaranteed bonus if the company hits its yearly target, and you book a vacation with the money as though it were already paid, even though hitting the target is far from assured.
Why your mind does this
Finishing what we start is usually a good strategy, since a brain that quit at every bump would never complete anything. Valuing what we already have, what we built and what we worked for keeps us committed and protects our resources. Losing what we have can hurt more than an equal gain helps, so caution around losses often makes sense.
Its family, in 30 seconds: Finishing what we started
How to spot it
Ask whether the guarantee you're counting on depends on an earlier step that could still fail.
How to counter it
Work out the odds of every stage together to find the true overall chance before you decide.