Abstract

Businesses across industries, such as food delivery apps and GPS navigation systems, routinely provide customers with time estimates in inherently uncertain contexts. How does the format of these time estimates affect customers’ satisfaction? Should firms offer a single “best” estimate or communicate uncertainty through a range? In eight preregistered experiments (N = 5,323), participants imagined using a new app that provided time estimates, and we manipulated whether the app presented the time estimates as a point estimate (e.g., “Your food will arrive in 45 minutes.”) or a range (e.g., “Your food will arrive in 40–50 minutes.”). After participants learned about the app’s prediction performance by sampling a set of past outcomes, participants evaluated the app. Participants evaluated the app more positively when it provided a range rather than a point estimate. These preferences held across different domains, different time durations, different underlying outcome distributions, and an incentive-compatible design. Importantly, this preference was not simply driven by aversion to late outcomes: participants also preferred ranges to conservative point estimates set at the range’s upper (later) bound. These findings suggest that firms can improve customer satisfaction by communicating the uncertainty inherent in time estimates. Building on this evidence, our ongoing research examines whether firms can make point estimates more effective by tailoring them to customers’ heterogeneous preferences for early versus late forecast errors.

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