Framing effect

Accentuate the positive or accentuate the negative? The literature has been mixed as to how the alternative framing of information in positive or negative terms affects judgments and decisions. We argue that this is because different studies have employed different operational definitions of framing and thus have tapped different underlying processes. We develop a typology to distinguish between three different kinds of valence framing effects. First we discuss the standard risky choice framing effect introduced by Tversky and Kahneman (1981) to illustrate how valence affects willingness to take a risk. Then we discuss attribute framing, which affects the evaluation of object or event characteristics, and goal framing, which affects the persuasiveness of a communication. We describe the distinctions, provide a number of examples of each type, and discuss likely theoretical mechanisms underlying each type of framing effect. Our typology helps explain and resolve apparent confusions in the literature, ties together studies with common underlying mechanisms, and serves as a guide to future research and theory development. We conclude that a broader perspective, focused on the cognitive

The ''framing effect'' is observed when the description of options in terms of gains (positive frame) rather than losses (negative frame) elicits systematically different choices. Few theories explain the framing effect by using cognitive information-processing principles. In this paper we present an explanatory theory based on the cost-benefit tradeoffs described in contingent behavior. This theory proposes that individuals examining various alternatives try to determine how to make a good decision while expending minimal cognitive effort. For this study, we used brain activation functional magnetic resonance imaging (fMRI) to evaluate individuals that we asked to choose between one certain alternative and one risky alternative in response to problems framed as gains or losses. Our results indicate that the cognitive effort required to select a sure gain was considerably lower than the cognitive effort required to choose a risky gain. Conversely, the cognitive effort expended in choosing a sure loss was equal to the cognitive effort expended in choosing a risky loss. fMRI revealed that the cognitive functions used by the decision makers in this study were localized in the prefrontal and parietal cortices of the brain, a finding that suggests the involvement of working memory and imagery in the selection process.

Though the long-term value of price discounting is questionable, it remains a common marketing practice. When price discounts are implemented there are different ways in which the same discount can be expressed, or 'framed', and this may affect consumers' reactions. This paper reports the results of a study designed to examine the effect on consumers' choice behaviour of framing the same price discount as a percentage or as a dollar amount, for lowpriced and high-priced items.

Many individuals find it difficult to make decisions about long term saving e.g. towards retirement. Financial regulators are concerned that providers of financial services can 'cherry pick' past performance information and present this selectively in their promotional materials. However, although prior research shows that past investment performance is generally not useful to retail investors in predicting future returns, these consumers continue to place emphasis on this information in their investment decisions. Because graphical information can be displayed selectively in a self-serving manner, it is important to test for any effect of prior performance presentation format on investor judgements. In this study, we use actual past performance charts in a controlled experiment to investigate whether (i) the format in which information is provided, and (ii) the timescale of the information provided, affects the investment fund choice of ordinary individuals. We find evidence that presenting past information in terms of fund values or percent yields significantly affects investment fund preference and perceptions of risk and return, but that the timescale of past performance information has no such impact. We discuss our results in the light of prior behavioural finance research and suggest policy implications for regulators. JEL Classification: C93, D91, G11 PsycINFO Classification: 3920

Recent studies have suggested that emotions play an important role in the susceptibility to the framing effect (i.e., decisions change depending on the description of the same outcomes as gains or losses). These suggestions raise the question of whether emotion regulation would reduce the susceptibility to framing. We used a neuroeconomic gambling task in which outcomes of decisions were framed as gains or losses, and instructed the participants to use cognitive reappraisal (i.e., reformulating the meaning of a situation in order to reduce its emotional impact) or expressive suppression (i.e., inhibiting behaviors associated with emotions) in order to modulate their emotions during the task. We found that in comparison to suppression, reappraisal reduced the framing effect. The use of reappraisal during the decision task was associated with increased positive affect, and decreased negative affect immediately after the task. We suggest that cognitive reappraisal reduces the susceptibility to framing by effectively regulating the emotions associated with the decision frames.

Prospect theory suggests that people are risk-averse when facing gains, but risk-prone when facing losses, a pattern known as the framing effect. Although framing effects have been widely demonstrated, few studies have investigated framing effects under conditions of need. Risk-sensitivity theory predicts that decision makers should prefer high-risk options in situations of high need, when lower risk options are unlikely to meet those needs. In two experiments, we examined (1) whether framing effects occurred in behavioural tasks involving risky decision making from description and decision making from experience, (2) whether participants' risky decision making conformed to the predictions of risk-sensitivity theory, and (3) whether decision framing interacted with conditions of need to influence decision making under risk. The results suggest that under all circumstances, risky decision making conformed to the predictions of risk-sensitivity theory. Framing effects were at least partially demonstrable under all experimental conditions. Finally, negative frames interacted with situations of high need to produce particularly elevated levels of risky choice. Together, the results suggest that risk-sensitivity theory can augment prospect theory to explain choice under conditions of need.

The world is experiencing a rapid rise in chronic health problems, which places an enormous burden on health care services. Modifiable health behaviors are largely responsible for this high prevalence and incidence of chronic diseases. This realization has made initiatives that promote healthy behaviors an international and interdisciplinary priority. How can nurses and other health care providers get the message across to their patients in order to maximize likelihood of leading to desired outcomes? Message tailoring is a well-established health communication approach shown to increase the persuasiveness of message effects in the promotion of healthy behaviors. Message framing is an effective message tailoring strategy that has been well-studied in the psychology literature over the past 20-plus years across a breadth of health behaviors while being severely understudied in the nursing literature. Numerous variables, especially those related to individual differences, have been sho...

The paper introduces a framework for users' design quality judgements based on Adaptive Decision Making theory. The framework describes judgement on quality attributes (usability, content / functionality, aesthetics, customisation and engagement) with dependencies on decision making arising from the user's background, task and context. The framework is tested and refined by three experimental studies. The first two assessed judgement of quality attributes of websites with similar content but radically different designs for aesthetics and engagement. Halo effects were demonstrated whereby attribution of good quality on one attribute positively influenced judgement on another, even in the face of objective evidence to the contrary (e.g. usability errors). Users' judgement was also shown to be susceptible to framing effects of the task and their background. These appear to change the importance order of the quality attributes; hence, quality assessment of a design appears to be very context dependent. The third study assessed the influence of customisation by experiments on mobile services applications, and demonstrated that evaluation of customisation depends on the users' needs and motivation. The results are discussed in the context of the literature on aesthetic judgement, user experience and trade-offs between usability and hedonic / ludic design qualities.

In the context of extensive social science research on framing, we discuss how framing objectively equivalent information can (but does not always) differentially affect individualsÕ attitudes and behaviors. Many of these framing effects have been found in the health communications and marketing literatures. Using a typology of framing developed by Levin et al. [Organ. Behav. Hum. Dec. Proc. 76 (1998) 149], we are able to classify prior tax compliance research, much of it reported in the Journal of Economic Psychology, that suggests decision frames influence tax reporting behavior. This prior research is now known as risky choice framing. Our study differs from this prior literature as, using goal framing, we manipulate two objectively equivalent messages (one positively framed, one negatively framed) that are communicated to adult taxpayers.

This empirical research investigates how political sophistication moderates framing effects on public opinion and attitudes. It explores when framing effects occur and who could be immune to such framing. Experimental results with multivariate analyses indicate that political sophistication enhances or reduces framing effects in shaping public views and stances, subject to the nature of public policy. When a public policy is promoted that is perceived as an easy issue, framing effects are significant for individuals who are less politically sophisticated. Alternatively, when a hard issue is presented, opposite results are observed. Framing effects are insignificant in promoting an ideological issue regardless of a person's political sophistication.

This paper develops an integrated framework of risk management and strategic competitive advantage that incorporates behavioural and economic notions of risk. The resulting model argues for the importance of risk-taking to sustainable competitive advantage and ultimately to firm performance. The model integrates framing effects of attainment discrepancy, transaction costs from implicit contracts theory and capital costs from finance theory. The proposed model suggests that continuous risk-taking by firms may help sustain competitive advantage and thus lower firm risk. This, in turn, effectively increases market returns to shareholders by ensuring earnings growth while simultaneously reducing the risk premium discount attached to a firm's future income stream.

Historically, research examining the influence of individual personality factors on decision processing has been sparse. In this paper we investigate how one important individual aspect, self-esteem, influences imposition and subsequent processing of ambiguously, negatively or positively framed decision tasks. We hypothesized that low self-esteem individuals would impose a negative frame onto ambiguous decision problems and would be especially sensitive to negatively framed decision tasks. In Study 1 we utilized a self-framing procedure and demonstrated that HSE participants were evenly divided in the hedonic valence they self-imposed whereas LSE participants were more likely to self-impose a negative frame. When these differences were accounted for, HSE and LSE participants were equivalent in risk seeking/avoiding choices. Study 2 used a risky-choice framing task and found that LSE individuals were especially sensitive to the negative frame. Study 3, provided converging evidence and generalization of these findings to a reflection tasks involving money.

Adolescent decision making derives from the functioning of two independent informationprocessing systems. Analytic processing -the focus of most previous decision making and cognitive developmental research -often produces responses consistent with those that have traditionally been deemed correct. Heuristic processing, by contrast, often produces judgments and decisions at odds with existing norms. In part because heuristic processing is the system's ''default,'' a large normative/ descriptive gap exists. In the present research, early adolescents, middle adolescents, and young adults solved probability, contrary-to-fact, and sunk cost decision-making problems. The normative/ descriptive gap decreased with age, but fallacious responses, assumed to reflect heuristic processing, were predominant across ages. ''Framing'' instructions to view the problems logically increased analytic processing and decreased, but by no means eliminated, the normative/descriptive gap. It is argued that by early adolescence, various heuristic processes and biases are firmly entrenched response tendencies that may represent overgeneralizations of strategies that are often adaptive. Prior to implementing decision-making interventions, the challenge of delineating conditions under which heuristic processing is adaptive and maladaptive must be met. D

Purpose -The purpose of this paper is to show whether positive or negative framing of preparation messages leads to higher intentions to prepare for earthquakes, and whether the more important component of the message is the framing of the preparation action or the framing of the outcome of not preparing. Design/methodology/approach -Four message conditions were created by crossing the framing of preparation actions (taking or not taking action) and the framing of outcomes (experiencing harm and avoiding harm in an earthquake). They were presented to citizens (n ¼ 240) in Wellington, New Zealand, who judged the general importance of preparation and specific preparation steps. Findings -The study finds that intentions to undertake both general and specific preparation were higher with negatively framed outcomes than positive outcomes. With specific actions, negative outcomes led to higher intentions to prepare when the action frame was positive (i.e. being well prepared). Research limitations/implications -This research shows that negative framing should apply to outcome preparation and not to the action of preparing Practical implications -These findings clarify that negative framing of outcomes is likely to increase preventive actions in relation to natural hazards. Originality/value -This is the first study to show the affects of message framing on preparing for disasters.

We design experiments to jointly elicit risk and time preferences for the adult Danish population. The experimental procedures build on laboratory experiments that have been evaluated using traditional subject pools. The field experiments utilize field sampling designs that we developed, and procedures that were chosen to be relatively transparent in the field with non-standard subject pools. Our overall design was also intended to be a general template for such field experiments in other countries. We examine the characterization of risk over a wider domain for each subject than previous experiments, allowing more precise estimates of risk attitudes. We also examine individual discount rates over six time horizons, as the first stage in a panel experiment in which we revisit subjects to test consistency and stability of responses over time. Risk and time preferences are heterogeneous, varying by observable individual characteristics. On a methodological level, we implement a refinement of existing procedures which elicits much more precise estimates, and also mitigates framing effects.

In the present study, the authors investigated the effects of framing of options on risky decision making in groups of younger adults (M = 23.8 years, n = 192) and older adults (M = 69.1 years, n = 192). The participants were assigned to one of three scenarios varying in the goods at stake (human lives, paintings, money). The authors observed a majority preference in favor of the risky options after negative, but not positive framing. They also found, as they had predicted, that the type of framing effect varied across scenarios, with a bidirectional framing effect for the life-death scenario and unidirectional (risk averse) framing effects when public property (paintings) or personal property (money) were at stake. It is important to note that these choice preference patterns were highly similar across the age groups, which reinforced the conclusion that younger and older adults are equally susceptible to framing effects.

We examine the properties of a popular method for elicitation of valuations from experimental subjects, the multiple price list format. The main advantages of this format are that it is relatively transparent to subjects and provides simple incentives for truthful revelation. The main disadvantages are that it only elicits interval responses, and could be susceptible to framing effects. We consider extensions to address and evaluate these concerns in the context of eliciting willingness to pay for products.