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The Framing of Decisions and The Psychology of Choice Kahneman and Tversky
The Framing of Decisions and The Psychology of Choice Kahneman and Tversky
independent of frame, but (iv) are often sion-maker to focus on future experience nomic Behavior Along Boyc>sian Lines (Irw~n,
uncertain how to resolve detected incon- and to ask "What will I feel then?" Homewood, Ill., 1965).
sistencies (23). In some cases (such as rather than "What do 1want now?" The quires a large number of observations. The pro-
former question, when answered with cedure of pricing gambles is more convenient for
problems 3 and 4 and perhaps problems 8 scaling purposes, but it is subject to a severe an-
and 9) the advantage of one frame be- care, can be the more useful guide
- in dif- choring bias: the ordering of gambles by their
comes evident once the competing ficult decisions. In particular, predictive the preference order observed in direct com-
frames are compared, but in other cases considerations may be applied to select parisons [S. Lichtenstein and P. Slovic, J. Exp.
(problems 1 and 2 and problems 6 and 7) the decision frame that best rewesents A new group of respondents (N = 126) was pre-
it is not obvious which preferences the hedonic experience of outcomes. sented with a modified version of problem 3, in
should be abandoned. Further complexities arise in the nor- of 50. The participants were informed that the
These observations do not imply that mative analysis because the framing of gambles would actually be played by tossing a
preference reversals, or other errors of an action sometimes affects the actual would be selected at random to play the gambles
choice or judgment (24), are necessarily experience of its outcomes. For ex- for the entire set, a third decision, yielding only
irrational. Like other intellectual limita- ample, framing outcomes in terms of positive outcomes, was added. These payoff
tions, disct~ssedby Simon (25) under the overall wealth or welfare rather than in ences observed in the hypothetical problem: 67
heading of "bounded rationality," the tenns of specific gains and losses may at- percent of respondents chose prospect A and 86
practice of acting on the most readily tenuate one's emotional response to an bination of A and D was chosen by 60 percent of
available frame can sometimes be justi- occasional loss. Similarly, the experi- respondents, and only 6 percent favored the
fied by reference to the mental effort re- ence of a change for the worse may vary S. Lichtenstein and P. Slovic, J . Exp. I'sychol.
quired to explore alternative frames and if the change is framed as an uncompen- Am. Econ. Rev. 69, 623 (1979); I. 1,ieblich and
avoid potential inconsistencies. How- sated loss or as a cost incurred to A. Lieblich, Pcrcc,pt. Mot. Skills 29, 467 (1969);
ever, we propose that the details of the achieve some benefit. The framing of No. 245 (California Institute of Technology,
phenomena described in this article are acts and outcomes can also reflect the Pasadena, 1979).
better explained by prospect theory and acceptance or rejection of responsibility tegrate concurrent options have been reported:
by an analysis of framing than by ad for particular consequences, and the de- P. Slovic and S. Lichtenstein, J . Exp. I'sychol.
hoc appeals to the notion of cost of liberate manipulation of framing is com- stein, ibid. 87, 13 (1971).
thinking. monly used as an instrument of self- McCrimmon and S . Larsson, in Expc>cted Util-
The present work has been concerned control (22). When framing influences ity Hypothe.se.s and the Allais Paradox, M. All-
primarily with the descriptive question the experience of consequences, the 1979).
of how decisions are made, but the psy- adoption of a decision frame is an ethi- Another group of respondents ( N = 205) was
chology of choice is also relevant to the cally significant act. orders, without monetary payoffs. The joint fre-
References and Notes and 7 was a s follows: ACE, 22; ACF, 65; ADE,
ought to be made. In order to avoid the 4; ADF, 20; BCE, 7; BCF, 18; BDE, 17; BDF,
1. J. Von Neurnann and 0. Morgenstern, Theory of 52. These data confirm in a within-subject design
difficult problem of justifying values, the Games a n d Economic Behavior (Princeton the analysis of conditional evaluation proposed
modern theory of rational choice has Univ. Press, Princeton, N.J., 1947); H. Raiffa, in the text. More than 75 percent of respondents
Decision Analysis: Lectures on Choices Under made compatible choices (AC or BD) in prob-
adopted the coherence of specific prefer- Uncertainty (Addison-Wesley, Reading, Mass., lems 5 and 6, and less than half made compatible
ences as the sole criterion of rationality. 1968); P. Fishburn, Utility Theory for 1)ecision choices in problems 6 and 7 (CE or DF) or 5 and
Making (Wiley, New York, 1970). 7 (AE or RF). The elimination of payoffs in these
This approach enjoins the decision- 2. L. J. Savage, The Foundations of S t ~ t i s t i c s questions reduced risk aversion but did not sub-
maker to resolve inconsistencies but of- (Wiley, New York, 1954). stantially alter the effects of certainty and
fers no guidance on how to do so. It im- 47, 263 (1979). For further discussion of rationality in pro-
4. The framing phase includes various editing oper- tective action see H. Kunreuther, Disortur In-
plicitly assumes that the decision-maker ations that are applied to simplify prospects, for surcmce Protection: Public Policy Lessons
who carefully answers the question example by comb~ningevents or outcomes o r by (Wiley, New York, 1978).
"What do I really want?" will eventually 5. I f p + y = I a n d e i t h e r x > y > O o r x < y < O , (1956).
achieve coherent preferences. However, the equation in the text is replaced by R. Thaler, J. Econ. Behav. Organ. 1 , 3 9 (1980).
the susceptibility of preferences to varia- weights are not applied to sure outcomes. nitive Prt,cc~.s.sesin Choice and 1)ecision Brhov-
6. P. Fishburn and G. Kochenberger, Decision Sci. ;or, T. Wallsten, Ed. (Erlbaum, Hillsdale, N.J.,
tions of framing raises doubt about the 10, 503 (1979); D. J. Laughhunn, J. W. Payne, 1980).
feasibility and adequacy of the coher- R. Crum, Manage. Sci., in press; J. W. Payne, J. C. Hershey and P. J. H. Schocmaker, J . Risk
Consistency is only one aspect of the in press. In the last study several hundred clinic 93, 189 (1979).
patients made hypothetical choices between R. H. Strotz. Rev. Econ. Stud. 23. 165 (1955): G.
lay notion of rational behavior. As noted drug therapies for severe headaches, hyperten- Ainslie, Psychol. Bull. 82, 463 (1975); J. Elster,
by March (26), the common conception sion, and chest pain. Most patients were risk Uly.ssc~.s a n d the Sirens; Studies in Rationality
averse when the outcomes were described a s and Irrntionolity (Cambridge Univ. Press, Lon-
of rationality also requires that prefer- positive (for example, reduced pain or increased don, 1979); R. Thaler and H. M. Shifrin, J. Polit.
life expectancy) and risk taking when the out- Econ., in press.
ences or utilities for particular outcomes comes were described as negative (increased P. Slovic and A. Tversky, Behav. Sci. 19, 368
should be predictive of the experiences pain or reduced life expectancy). No significant (1974).
differences were found between patients who A. Tversky and D. Kahneman, Science 185,
of satisfaction or displeasure associated actually suffered from the ailments described 1124 (1974); P. Slovic, B. Fischhoff, S. Lich-
with their occurrence. Thus, a man could and patients who did not. tenstein, Annrr. Rev. Psychol. 28, 1 (1977); R.
7. E. Galanter and P. Pliner, in Sensation a n d Nisbett and L . Ross, Numcm 1nfi.rc.nce: Strate-
be judged irrational either because his Measurement, H. R. Moskowitz 6.t a / . , Eds. gies a n d Shortcomings qf Social Judgmcwt
preferences are contradictory or because (Reidel, Dordrecht, 1974), pp. 65-76. (Prentice-Hall, Englewood Cliffs, N.J., 1980);
8. The extension of the proposed value function to H. Einhorn and R. Hogarth, Annu. Rev. Psy-
his desires and aversions do not reflect multiattribute options, with or without risk, de- chol. 32, 53 (1981).
serves careful analysis. In particular, indif- H. A. Simon, Q. J . Econ. 69,99 (1955); P.sycho1.
his pleasures and pains. The predictive Rev. 63, 129 (1956).
tions for the separate losses are both convex, This work was supported by the Office of Naval
resolve inconsistent preferences and to because of marked subadditivity between di- Research under contract No014-79-C-0077 to