The Framing of Decisions and the Psychology of Choice¶
Why this mattered¶
TBD
Abstract¶
The psychological principles that govern the perception of decision problems and the evaluation of probabilities and outcomes produce predictable shifts of preference when the same problem is framed in different ways. Reversals of preference are demonstrated in choices regarding monetary outcomes, both hypothetical and real, and in questions pertaining to the loss of human lives. The effects of frames on preferences are compared to the effects of perspectives on perceptual appearance. The dependence of preferences on the formulation of decision problems is a significant concern for the theory of rational choice.
Related¶
- cite → Judgment under Uncertainty: Heuristics and Biases — Framing of Decisions applies the heuristics-and-biases program to show that choices change when equivalent outcomes are framed as gains or losses.
- cite → A Behavioral Model of Rational Choice — Framing of Decisions builds on Simon's bounded rationality by showing systematic departures from fully rational choice under cognitive limits.
- cite → Prospect Theory: An Analysis of Decision under Risk — Framing of Decisions applies prospect theory's reference dependence and loss aversion to explain why equivalent decision frames produce different preferences.
- cite → Judgment under Uncertainty: Heuristics and Biases — Framing of Decisions draws on the 1974 heuristics-and-biases account to explain framing effects as systematic judgment errors rather than random noise.
- enables ← Judgment under Uncertainty: Heuristics and Biases — The heuristics-and-biases account of judgment under uncertainty provided the cognitive foundation for the later framing-effects claim in risky choice.
- enables ← A Behavioral Model of Rational Choice — Simon's bounded rationality challenged perfect-optimization models, enabling framing theory's claim that decision behavior depends on psychologically constrained representations.
- enables ← Judgment under Uncertainty: Heuristics and Biases — The 1974 heuristics-and-biases paper identified systematic judgment errors that framing theory extended to preference reversals under different descriptions of the same choice.