Description

What is the Framing effect?

Which one of these products would you pick: A ‘95% effective’ condom or a ‘5% failure’ condom? ‘80% lean’ ground beef or ‘20%’ fat ground beef? Most people would be more likely to choose the first option in both cases, even though the two choices are identical.

The standard economic model predicts that people will always make the same choice if given the same outcomes, by maximizing expected utility. In their groundbreaking 1979 study, Amos Tversky and Daniel Kahnemann demonstrated that the choices we make are also influenced by the way they are framed. Different wordings, settings, and situations will have a powerful effect on decision-makers.

Framing often comes in the form of gains or losses, as in prospect theory (Kahneman & Tversky, 1979). This theory demonstrates that a loss is perceived as more significant, and thus more worthy of avoiding, than an equivalent gain. In the hierarchy of choice architecture a sure gain is preferred to a probable one, and a probable loss is preferred to a sure loss.  Choices can also be worded in a way that highlights the positive or negative aspects of the same decision, and thus prompt the affect heuristic to come to the fore.

Why is it important?

The framing effect has consistently proven to be one of the strongest biases in decision making.The ways in which framing can be used are nearly unlimited; from emotional appeals to social pressure to priming.

When a positive frame is presented people are more likely to avoid risks, but will be risk-seeking when a negative frame is presented. Especially important to note is that the effect seems to increase with age, which is important when designing health and financial policies.

Example

There are many prominent examples of framing e.g. proposing the risk of losing 10 out of 100 lives vs the opportunity to save 90 out of 100 lives, advertising beef that is 95% lean vs 5% fat, or motivating people by offering a $5 reward vs imposing a $5 penalty (Levin, Schneider, & Gaeth, 1998).

Tversky and Kahneman asked participants in their study to decide between two treatments for 600 people who contracted a fatal disease. Treatment A would result in 400 deaths, and treatment B had a 33% chance that no one would die but a 66% chance that everyone would die. This was done with either positive framing (how many people would live) or negative framing (how many people would die). Treatment A received the most support (72%) when framed as saving 200 lives, but dropped significantly (to 22%) when framed as losing 400 lives.

Almost 100% of students registered early when a penalty fee frame was presented for not doing so, compared with just over 65% when it was framed as a discount (Gächter et al., 2009)

In one study, a minority supported the right to “forbid public condemnation of democracy”, but a clear majority opposed allowing “public condemnation of democracy”(Rugg in  Plous, 1993). 

Economic policies receive higher support when framed in terms of the employment rates rather than unemployment rates. (Druckman, 2001b)

Pre-trial detention can encourage a defendant to accept a plea bargain because imprisonment has now been set as the status quo, and a guilt plea might lead to early release rather than an act that guarantees some prison time (Bibas,  2004).

 

 

 

Bibas, Stephanos (2004). “Plea Bargaining outside the Shadow of Trial”. Harvard Law Review. 117 (8): 2463–47

Druckman, J. (2001a).  “Evaluating framing effects” Journal of Economic Psychology. 22: 96–101.

Druckman, J. (2001b). “Using credible advice to overcome framing effects”. Journal of Law, Economics, and Organization. 17: 62–82

Gächter, S.; Orzen, H.; Renner, E.; Stamer, C. (2009).  “Are experimental economists prone to framing effects? A natural field experiment”  Journal of Economic Behavior & Organization. 70 (3): 443–46.

Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47, 263-291.

Levin, I. P., Schneider, S. L., & Gaeth, G. J. (1998). All frames are not created equal: A typology and critical analysis of framing effects. Organizational Behavior and Human Decision Processes, 76, 149-188.

Rugg, as cited in  Plous, Scott (1993). The psychology of judgment and decision making.  McGraw-Hill

Tversky, Amos; Kahneman, Daniel (1981). “The Framing of decisions and the psychology of choice”. Science. 211 (4481):453–58.  

 

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