Possibility effect
Moving a risk from impossible to merely possible feels disproportionately large.
What it means
The possibility effect is the disproportionate weight people place on outcomes when their probability rises from zero to a small positive value — the leap from impossible to possible. Because the decision-weight function is steep near zero, a sliver of probability commands far more attention than its objective size warrants, which is why low-probability gains attract lottery players and low-probability catastrophes attract insurance buyers and dread. It is the mirror-image partner of the certainty effect, which governs the steep region near probability one. Together they explain the inverse-S shape of the weighting function and much of the fourfold pattern. The possibility effect also helps explain why vivid, near-zero-probability hazards capture public fear out of proportion to their likelihood.
Examples
People will pay surprisingly much to cut a risk from 1% to 0%, yet far less to cut the same risk from 5% to 4%.
A $2 lottery ticket sells because it moves winning from impossible to just about possible; buying a second ticket, which doubles the odds, feels like almost nothing at all.
A vanishingly rare side effect on the leaflet dominates the decision to take a drug, while the far likelier harm of leaving the illness untreated barely registers.
First described in Kahneman & Tversky (1979); Tversky & Kahneman (1992).