Description:

The Framing Effect refers to the cognitive bias in decision-making where people react differently based on how choices or information are presented, or “framed”. The way options are phrased or the context in which information is conveyed can significantly impact the decisions people make.

Subtypes:

• Attribute framing: This occurs when the way a particular attribute or characteristic is presented influences decision-making. For example, describing a product as “90% fat-free” rather than “10% fat” can make it more appealing.
• Goal framing: In this case, decisions are influenced by the way in which goals or outcomes are framed. For instance, individuals may be more likely to take actions when presented with a message emphasizing the potential gains rather than the potential losses.
• Positive vs. negative framing: People tend to weigh potential losses more heavily than equivalent gains. Presenting information in a positive or negative light can impact decision-making. Highlighting benefits may result in more favorable choices, while emphasizing risks or drawbacks may lead to more cautious decisions.

Example:

Imagine a study where participants are presented with two options for a medical procedure. Option A is described as having a 90% success rate, while Option B is described as having a 10% failure rate. Despite conveying the same information, participants may perceive Option A as more favorable due to the positive framing of the success rate.

Importance:

The Framing Effect has significant implications as it illustrates how the way information is presented can influence decision-making, leading to biased choices. Understanding this cognitive bias can help individuals and organizations make more informed and objective decisions by considering the influence of framing and striving for a balanced presentation of information.