Come and See What We‘ve Found: Reconsidering Uncertainty in Preannouncements

Before a firm undertakes a particular action, such as a product launch, information asymmetry and uncertainty exist about the exact details. While existing preannouncement literature views uncertainty as generally negative and, thus, suggests to avoid uncertainty at all times, this paper argues for a more nuanced understanding of uncertainty in preannouncements. Findings demonstrate that uncertain preannouncements lead to higher market anticipation (curiosity, excitement, and interest) than certain preannouncements. Therefore, instead of always avoiding uncertainty, firms should strategically manage uncertainty in preannouncements, but need to take into consideration the level of uncertainty they communicate in their preannouncements.