Framing Effect In Decision Making

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Tversky and Kahneman, major investigators of irrationality in human judgments, asserted that “logic of choice does not provide adequate foundation for decision making.” People tend to believe that their judgments are logical selections based upon their knowledge and experiences. But in reality, the judgments are not completely rational but rather biased according to the words presenting the choices. This rule can be explained via framing effect. The inconsistency of selections in equivalent choices with different wordings is the most observable evidence of framing effect. According to Levin, Schneider, and Gaeth’s paper written in 1998, there are three major types of framing effect: attribute framing, risky choice framing, and goal framing. Following parts of paper will describe the types of framing effects as well as the influential extant of framing effect on the logical decisions of people in real world.
As mentioned above, there are three types of framing effect, and one of them is called attribute framing. Attribute framing is a variation of description on a same object with either positive words or negative words that ultimately leads to the same consequence. The positivity or negativity of a choice comes upon people’s mind through knowledge or experience. For example, word “death” is perceived as negative wording because it often gives sorrows to people. On the other hand, word “life” comes in as positive wording since it usually brings about joy among people. People often focus the choices with positive words rather than negative ones. Just upon hearing, this seems very obvious because people make choice on behalf of their benefits, and positive descriptions often more emphasize the possible gains. The problem of irrationa...

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...focus that people give on the disadvantages makes it useful over advantages.
There are various framing effects in our world that we do not recognize. The most prevalent usage of the effect may appear in financial markets. Many companies utilize framing effects to sell their product since it can affect the judgment of consumer. However, it
Psych 9B Extra Credit Paper can be questioned whether framing effect is deceiving the customers. Framing effect is not conveying information but rather manipulate logic of consumers and how they think. Therefore, since they do not have information, framing cannot be regulated to be deceiving customers. Apart from the ethics of using framing effect to manipulate the rational decisions, what people need to understand is the incapability of human beings in making rational choices based upon true observation on consequences and meaning.

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