The “motivating-uncertainty effect” stems from relatively new research, which has found that people tend to be motivated more by uncertain rewards than by rewards of a certain magnitude, but only when they focus on the process of achieving the reward and not the reward itself. Uncertainty provides a more positive experience because of the excitement which it causes, and this excitement increases motivation. Thus, the benefits of an uncertain reward are twofold: people work harder to achieve these uncertain goals, and enjoy themselves more in the process. These findings are particularly applicable in understanding risk tolerance and motivation and can be applied directly to various fields including consumer-incentive programs.
Many studies have found that people are put forth greater effort and investment (of both time and money) to a situation with a 50% chance at being rewarded $2 and a 50% chance at being rewarded $1 than they put forth in situations where the reward is certain to be $2.