Which One Do You Prefer? (Impacts of framing on decision and choice)
By Bahram Mirfakhraei
Which one do you prefer?
1) A sure win of 30$
2) 80% chance to win 45$
What do you think about when you want to answer such questions? What comes to your mind?
According to Tversky and Kahneman, a choice process includes two steps. In first step the outcomes are framed and in second step they are evaluated. In other words, first we think about outcomes of each option and then we compare them. Most of the times, people do not notice this process while they are answering such questions. But it is what happens automatically. During a trade-off between the options, usually low probabilities are overestimated, high probabilities are underestimated and the option with highest utility will be selected.
Tversky and Kahneman describe “desicion frame” as:
“Decision-maker’s conception of the acts, outcomes, and contingencies associated with a particular choice”.
They also mention that formulation of the problem in addition to personality and habits of the decision maker affect the framing. Formulating a single question in different ways can result in different responses. For instance, imagine there has been an outbreak of a disease and it is expected that 600 people will die. Which of the following options will you choose?
If program A is adopted, 200 people will be saved
If program B is adopted, there is 1/3 probability that 600 people will be saved and 2/3 probability that no people will be saved
In Tversky and Kahneman’s study, 72% of the respondents chose program A.
Same question can be formulated in a different way. Imagine conditions are the same but this time:
If program C is adopted, 400 people will die
If program D is adopted, there is 1/3 probability that nobody will die, and 2/3 probability that 600 people will die
This time 78% of respondents chose program D.
These options are the same and their only difference is in the way that they are formulated. The options in first question are based on the lives that can be saved, while in second question the options are based on the lives that will be lost. Even though the questions are the same, the option that majority of respondents chose was different.
Therefore, if a question is formulated differently, it will be framed differently. Consequently, respondent’s choice and decision will be different. So, framing plays a key role in decision-making and change in framing can result in change of decision.
TVERSKY, A. & KAHNEMAN, D. 1981. The framing of decisions and the psychology of choice. Science, 211, 453-458.