The framing effect is a cognitive bias in which people decide between options based on whether the options are presented with positive or negative connotations. [1] Individuals have a tendency to make risk-avoidant choices when options are positively framed, while selecting more loss-avoidant options when presented with a negative frame. In studies of the bias, options are presented in terms of the probability of either losses or gains. While differently expressed, the options described are in effect identical. Gain and loss are defined in the scenario as descriptions of outcomes, for example, lives lost or saved, patients treated or not treated, monetary gains or losses. [2]
Prospect theory posits that a loss is more significant than the equivalent gain, [2] that a sure gain (certainty effect and pseudocertainty effect) is favored over a probabilistic gain, [3] and that a probabilistic loss is preferred to a definite loss. [2] One of the dangers of framing effects is that people are often provided with options within the context of only one of the two frames. [4]
The concept helps to develop an understanding of frame analysis within social movements, and also in the formation of political opinion where spin plays a large role in political opinion polls that are framed to encourage a response beneficial to the organization that has commissioned the poll. It has been suggested that the use of the technique is discrediting political polls themselves. [5] The effect is reduced, or even eliminated, if ample credible information is provided to people. [5]
Amos Tversky and Daniel Kahneman explored how different phrasing affected participants' responses to a choice in a hypothetical life and death situation in 1981. [2]
Participants were asked to choose between two treatments for 600 people affected by a deadly disease. Treatment A was predicted to result in 400 deaths, whereas treatment B had a 33% chance that no one would die but a 66% chance that everyone would die. This choice was then presented to participants either with positive framing, i.e. how many people would live, or with negative framing, i.e. how many people would die.
Framing | Treatment A | Treatment B |
---|---|---|
Positive | "Saves 200 lives" | "A 33% chance of saving all 600 people, 66% possibility of saving no one." |
Negative | "400 people will die" | "A 33% chance that no people will die, 66% probability that all 600 will die." |
Treatment A was chosen by 72% of participants when it was presented with positive framing ("saves 200 lives") dropping to 22% when the same choice was presented with negative framing ("400 people will die").
A recent study was done on the framing effect in the context of the COVID-19 pandemic. Researchers found that the framing effect was larger in this context than under normal circumstances, indicating that individuals were more influenced by how options were presented during the pandemic. There was a positive association between the framing effect and perceived stress and concerns related to coronavirus, indicating that these factors are influential when it comes to decision-making. However, they were not related to risk aversion. [6]
This effect has been shown in other contexts:
In logic, extensionality requires "two formulas which have the same truth-value under any truth-assignments to be mutually substitutable salva veritate in a sentence that contains one of these formulas." [10] Put simply, objects that have the same external properties are equal. This principle, applied to decision making, suggests that making a decision in a problem should not be affected by how the problem is described. For example, varied descriptions of the same decision problem should not give rise to different decisions, due to the extensionality principle. If judgments are made on the basis of irrelevant information as described, that is called an extensionality violation. Addressing extensionality violations entails cultivating awareness of how different descriptions of a problem may inadvertently influence decisions, and as a result developing strategies to mitigate such deviations. In doing so, decision-makers can aim to uphold the extensionality principle as a guide in navigating the complexity of choice, focusing on decisions that are more in tune to the inherent properties of the problem rather than its descriptions. [10]
The framing effect has consistently been shown to be one of the largest biases in decision making. [11] In general, susceptibility to framing effects increases with age. Age difference factors are particularly important when considering health care [12] [13] [14] and financial decisions. The susceptibility to framing can influence how older individuals perceive and in turn respond to information, potentially leading to less optimal choices that can have lasting consequences. In healthcare, for instance, where decisions profoundly affect well-being, the framing effect can sway older individuals towards or away from certain treatment options based on the way in which the medical information is presented. Likewise, in financial decision-making, the framing of retirement planning or investment risks may have significant impacts on the choices individuals make, potentially impacting their financial security and state in the later stages of their lives. [15]
However, the framing effect seems to disappear when encountering it in a foreign (non-native) language. [16] : 246 [17] One explanation of this disappearance is that a non-native language provides greater cognitive and emotional distance than one's native tongue. [18] A foreign language is also processed less automatically than a native tongue. This leads to more deliberation, which can affect decision making, resulting in decisions that are more systematic. [19]
Framing effects in decision-making become stronger as children age. [20] [21] [22] This is partially because qualitative reasoning increases with age. [20] While preschoolers are more likely to make decisions based on quantitative properties, such as probability of an outcome, elementary schoolers and adolescents become progressively more likely to reason qualitatively, opting for a sure option in a gain frame and a risky option in a loss frame regardless of probabilities. [20] The increase in qualitative thinking is related to an increase in "gist based" thinking that occurs over a lifetime. [23]
However, qualitative reasoning, and thus susceptibility to framing effects, is still not as strong in adolescents as in adults, [20] [22] and adolescents are more likely than adults to choose the risky option under both the gain and loss frames of a given scenario. [21] One explanation for adolescent tendencies toward risky choices is that they lack real-world experience with negative consequences, and thus over-rely on conscious evaluation of risks and benefits, [21] focusing on specific information and details or quantitative analysis. [24] This reduces influence of framing effects and leads to greater consistency across frames of a given scenario. [24] Children between the ages of 10 and 12 are more likely to take risks and show framing effects, while younger children only considered the quantitative differences between the two options presented. [25]
Younger adults are more likely than older adults to be enticed by risk-taking when presented with loss frame trials. This is a noteworthy phenomenon that underscores the complex interplay between age and decision-making tendencies. [11]
In multiple studies of undergraduate students, researchers have found that students are more likely to prefer options framed positively. This could be attributed to a variety of factors such as an inclination for novelty-seeking, a more optimistic outlook on outcomes, or even a reduced aversion to risk which is inherent in youth. [26] For example, they are more likely to enjoy meat labeled 75% lean meat as opposed to 25% fat, or use condoms advertised as being 95% effective as opposed to having a 5% risk of failure. [26]
Young adults are especially susceptible to framing effects when presented with an ill-defined problem in which there is no correct answer and individuals must arbitrarily determine what information they consider relevant. [26] For example, undergraduate students are more willing to purchase an item such as a movie ticket after losing an amount equivalent to the item's cost than after losing the item itself.This susceptibility underscores the importance of considering psychological factors in the context of decision-making. Recognizing this vulnerability emphasizes the need for decision-makers to be aware of cognitive biases when navigating decision-making in which there isn't a clear answer so that they can take a more informed approach. [26]
The framing effect is claimed to be greater in older adults than in younger adults or adolescents. [12] [13] [27] This claim may be a result of enhanced negativity bias, [13] though some sources claim that the negativity bias actually decreases with age. [15]
In particular, this increased susceptibility to the framing effect manifested itself mainly in response to negative frames. Positive framings were not found to have a significant effect on the framing effect in older adults. [27] This may be due in part to socioemotional selectivity theory, where the increased age shifts the focus of adults from risk taking to maximizing their emotional experiences in the present, hence the increased framing in the negative frame. [27] The dual process theory may also play a role as negative framings evoke less heightened responses, leading to the deployment of the implicit processes. The implicit process is found to be frame-sensitive, and thus may be the reason why framing is pronounced in negative frames for older adults. [27] [28]
Another possible cause is that older adults have fewer cognitive resources available to them and are more likely to default to less cognitively demanding strategies when faced with a decision. [11] They tend to rely on easily accessible information, or frames, regardless of whether that information is relevant to making the decision in question. [11] Several studies have shown that younger adults will make less biased decisions than older adults because they base their choices on interpretations of patterns of events and can better employ decision making strategies that require cognitive resources like working-memory skills. Older adults, on the other hand, make choices based on immediate reactions to gains and losses. [11]
Older adults' lack of cognitive resources, such as flexibility in decision making strategies, may cause older adults to be influenced by emotional frames more so than younger adults or adolescents. [29] In addition, as individuals age, they make decisions more quickly than their younger counterparts. [11] It is significant that, when prompted to do so, older adults will often make a less biased decision with reevaluation of their original choice. [11] [12]
The increase in framing effects among older adults has important implications, especially in medical contexts. [12] [13] [14] [27] Older adults are influenced heavily by the inclusion or exclusion of extraneous details, meaning they are likely to make serious medical decisions based on how doctors frame the two options rather than the qualitative differences between the options, causing older adults to inappropriately form their choices. [11]
When considering cancer treatments, framing can shift older adults' focus from short- to long-term survival under a negative and positive frame, respectively. [12] When presented with treatment descriptions described in positive, negative, or neutral terms, older adults are significantly more likely to agree to a treatment when it is positively described than they are to agree to the same treatment when it is described neutrally or negatively. [13] Additionally, framing often leads to inconsistency in choice: a change in description qualities after an initial choice is made can cause older adults to revoke their initial decision in favor of an alternative option. [13] Older adults also remember positively framed statements more accurately than negatively framed statements. [12] [30] This has been demonstrated by evaluating older adults' recall of statements in pamphlets about health care issues. [12] [30]
A cognitive bias is a systematic pattern of deviation from norm or rationality in judgment. Individuals create their own "subjective reality" from their perception of the input. An individual's construction of reality, not the objective input, may dictate their behavior in the world. Thus, cognitive biases may sometimes lead to perceptual distortion, inaccurate judgment, illogical interpretation, and irrationality.
In economics and business decision-making, a sunk cost is a cost that has already been incurred and cannot be recovered. Sunk costs are contrasted with prospective costs, which are future costs that may be avoided if action is taken. In other words, a sunk cost is a sum paid in the past that is no longer relevant to decisions about the future. Even though economists argue that sunk costs are no longer relevant to future rational decision-making, people in everyday life often take previous expenditures in situations, such as repairing a car or house, into their future decisions regarding those properties.
In the field of psychology, cognitive dissonance is the perception of contradictory information and the mental toll of it. Relevant items of information include a person's actions, feelings, ideas, beliefs, values, and things in the environment. Cognitive dissonance is typically experienced as psychological stress when persons participate in an action that goes against one or more of those things. According to this theory, when an action or idea is psychologically inconsistent with the other, people do all in their power to change either so that they become consistent. The discomfort is triggered by the person's belief clashing with new information perceived, wherein the individual tries to find a way to resolve the contradiction to reduce their discomfort.
Behavioral economics is the study of the psychological, cognitive, emotional, cultural and social factors involved in the decisions of individuals or institutions, and how these decisions deviate from those implied by classical economic theory.
In psychology, decision-making is regarded as the cognitive process resulting in the selection of a belief or a course of action among several possible alternative options. It could be either rational or irrational. The decision-making process is a reasoning process based on assumptions of values, preferences and beliefs of the decision-maker. Every decision-making process produces a final choice, which may or may not prompt action.
Hindsight bias, also known as the knew-it-all-along phenomenon or creeping determinism, is the common tendency for people to perceive past events as having been more predictable than they were.
Loss aversion is a psychological and economic concept, which refers to how outcomes are interpreted as gains and losses where losses are subject to more sensitivity in people's responses compared to equivalent gains acquired. Kahneman and Tversky (1992) suggested that losses can be twice as powerful psychologically as gains.
The anchoring effect is a psychological phenomenon in which an individual's judgements or decisions are influenced by a reference point or "anchor" which can be completely irrelevant. Both numeric and non-numeric anchoring have been reported in research. In numeric anchoring, once the value of the anchor is set, subsequent arguments, estimates, etc. made by an individual may change from what they would have otherwise been without the anchor. For example, an individual may be more likely to purchase a car if it is placed alongside a more expensive model. Prices discussed in negotiations that are lower than the anchor may seem reasonable, perhaps even cheap to the buyer, even if said prices are still relatively higher than the actual market value of the car. Another example may be when estimating the orbit of Mars, one might start with the Earth's orbit and then adjust upward until they reach a value that seems reasonable.
Status quo bias is an emotional bias; a preference for the maintenance of one's current or previous state of affairs, or a preference to not undertake any action to change this current or previous state. The current baseline is taken as a reference point, and any change from that baseline is perceived as a loss or gain. Corresponding to different alternatives, this current baseline or default option is perceived and evaluated by individuals as a positive.
Choice-supportive bias or post-purchase rationalization is the tendency to retroactively ascribe positive attributes to an option one has selected and/or to demote the forgone options. It is part of cognitive science, and is a distinct cognitive bias that occurs once a decision is made. For example, if a person chooses option A instead of option B, they are likely to ignore or downplay the faults of option A while amplifying or ascribing new negative faults to option B. Conversely, they are also likely to notice and amplify the advantages of option A and not notice or de-emphasize those of option B.
An emotional bias is a distortion in cognition and decision making due to emotional factors.
The negativity bias, also known as the negativity effect, is a cognitive bias that, even when of equal intensity, things of a more negative nature have a greater effect on one's psychological state and processes than neutral or positive things. In other words, something very positive will generally have less of an impact on a person's behavior and cognition than something equally emotional but negative. The negativity bias has been investigated within many different domains, including the formation of impressions and general evaluations; attention, learning, and memory; and decision-making and risk considerations.
Mara Mather is a professor of gerontology and psychology at the USC Davis School of Gerontology. Her research deals with aging and affective neuroscience, focusing on how emotion and stress affect memory and decisions. She is the daughter of mathematician John N. Mather.
Choice architecture is the design of different ways in which choices can be presented to decision makers, and the impact of that presentation on decision-making. For example, each of the following:
Fuzzy-trace theory (FTT) is a theory of cognition originally proposed by Valerie F. Reyna and Charles Brainerd to explain cognitive phenomena, particularly in memory and reasoning.
Cognitive bias mitigation is the prevention and reduction of the negative effects of cognitive biases – unconscious, automatic influences on human judgment and decision making that reliably produce reasoning errors.
Vulnerability refers to "the quality or state of being exposed to the possibility of being attacked or harmed, either physically or emotionally." The understanding of social and environmental vulnerability, as a methodological approach, involves the analysis of the risks and assets of disadvantaged groups, such as the elderly. The approach of vulnerability in itself brings great expectations of social policy and gerontological planning. Types of vulnerability include social, cognitive, environmental, emotional or military.
Risk aversion is a preference for a sure outcome over a gamble with higher or equal expected value. Conversely, rejection of a sure thing in favor of a gamble of lower or equal expected value is known as risk-seeking behavior.
The description-experience gap is a phenomenon in experimental behavioral studies of decision making. The gap refers to the observed differences in people's behavior depending on whether their decisions are made towards clearly outlined and described outcomes and probabilities or whether they simply experience the alternatives without having any prior knowledge of the consequences of their choices.