group a group members: shahram moradi ali mansouri under supervision of dr. m.t. isaei
TRANSCRIPT
FramingGroup A
Group Members:Shahram Moradi
Ali Mansouri
Under Supervision of Dr. M.T. Isaei
Content
Introduction
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
Introduction Introduction
What is a Frame
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
Decision/Choice
Judgment
Mental Representation
Decision Problem
What is a Frame?
Refers to a mental model of the decision
problems, used to solve them
Frame
DifferentFrames
Different ways of looking at the same
problems
Introduction
What is a Frame
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
To Frame, or To Be Framed?
Decision Makers use information in the
context of the Frame without Reframing it
Concreteness Principle
• Previous patterns & Experience
• Norms & Expectations
• Desire for simplicity • Habits
Framing depends on
some Factors
Introduction
What is a Frame
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
Framing Types:
Outcome Framing
Structure Framing
Task Framing
Loss-Aversion as Outcome Framing
Effects
Introduction
What is a Frame
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
Outcome Framing Introduction
What is a Frame
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
Framing as Gains or Losses
Framing as aggregate or disaggregate Quantities
Framing by scaling the outcome in a different currency
Framing as Gains or LossesAsian Disease Which is expected to kill 600 people
%72
%28
Survey
200 people will be saved
600 people will be saved
No people will be saved
A
B
0.33
0.66
Problem 1
Introduction
What is a Frame
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
Asian Disease Which is expected to kill 600 people
%22
%78
Survey
400 people will die
Nobody Will die
600 people will die
C
D
0.33
0.66
Problem 2
Different Framing of Outcomes
Risk – Aversion
to Risk -
Seeking
Introduction
What is a Frame
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
Risk Situation
Profit
Risk Averse
LossRisk Seek
Introduction
What is a Frame
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
Prospect Theory
concave
convex
Risk- Seeking Behavior
Risk- AversionBehavior
Introduction
What is a Frame
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
Insurance
Actual lossLoss with
high probability
INSURANCE???
PAD strategy(Pennies-a-Day)
Enjoy riding your own motorcycle for
only $1 a day!!!
Introduction
What is a Frame
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
Loss Aversionand Outcome Framing Effects
$1500
$ 3000
Nothing
%65
%35
Survey
A
B
0.50
0.50
Problem 3
Introduction
What is a Frame
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
-$1500
-$ 3000
Nothing
%28
%72
Survey
A
B
0.50
0.50
Problem 4 You are given $3,000
Loss Aversion
Reduction in
Risk - Aversion
Introduction
What is a Frame
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
The Endowment effectAn immediate consequence of Loss Aversion
People’s willingness to demand more than to pay for something
Introduction
What is a Frame
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
The Sunk-Cost Effect
Some Past Investment
Continue
Introduction
What is a Frame
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
Advantages and DisadvantagesIntroduction
What is a Frame
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
Job Social contact Daily travel time
Present job
Isolated for long stretches
10
Job X Limited contacts with others
20
Job Y Moderately sociable 60
Job Social contact Daily travel time
Present job
Much pleasant social interaction
80
Job X Limited contacts with others
20
Job Y Moderately sociable 60
Gain LossLoss Gain
Other Outcome Framing Effects
Status quo Bias Tendency to retain the
Status quo
Reluctance to
chooseEvaluation of forgone
Alternatives more highly after decision making
Introduction
What is a Frame
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
Structure Framing
The size and arrangement of the decision maker’s
view
Three ways
The Integration and Segregation of
Information
Sequential Framing of contingent events
The Scope of the Frame
Introduction
What is a Frame
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
The Integration and Segregation of Information
$ 250
-$750
%0
%100
Survey
E
F
0.25
0.75
Problem 5 $ 240
-$760
0.25
0.75
Introduction
What is a Frame
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
Surve
yProblem 6
Dec. # 1
A
B
0.25
0.75
$240
$ 1,000
Nothing
%84
%16
-$750
-$ 1,000
Nothing
Dec. # 2
C
D
0.25
0.75
%13
%87
%73
%0
A D E
%3 %100
B C F
Introduction
What is a Frame
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
Introduction
What is a Frame
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
Sequential Framing of Contingent Events
Problem 7 Two Stage Game
%25 chance to move into the 2nd Stage%75 chance to lose the game
A : a sure gain of $30B: %80 chance to win $45
C: %25 chance to win $30D: %20 chance to win $45
Problem 8
%74
%26
%42
%58
Task Framing
Decision as
Reject options from the set
Choose one option from the set
Result
Different Weighting of Positive/Negative Features
of options
Introduction
What is a Frame
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
Task FramingProblem 9 Sole–Custody of
child Parent A :
Average income Average health Average working hours Reasonable rapport with the child Relatively stable social life
Parent B : Above-Average incomeVery close relationship with the childExtremely active in social lifeLots of work-related travelMinor health problems
%36
%64 %55
%45
Award
Deny
Introduction
What is a Frame
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
conclusion
Framing matters not only in experimental investigations, but also in the real world
People accept any Frame that is presented to them passively
Looking Differently to subjects will result in Different decisions
Introduction
What is a Frame
Outcome Framing
Loss Aversion
Structure Framing
Task Framing
Conclusion
Thanks for your
attention