IDEAS home Printed from https://ideas.repec.org/a/eee/jobhdp/v122y2013i2p190-199.html
   My bibliography  Save this article

A big fish or a small pond? Framing effects in percentages

Author

Listed:
  • Li, Meng
  • Chapman, Gretchen B.

Abstract

This paper presents three studies that demonstrate people’s preference for a large percentage of a small subset over a small percentage of a large subset, when the net overall quantity is equated. Because the division of a set into subsets is often arbitrary, this preference represents a framing effect. The framing effect is particularly pronounced for large percentages. We propose that the effect has two causes: A partial neglect of the subset information, and a non-linear shaped function in the way people perceive percentages.

Suggested Citation

  • Li, Meng & Chapman, Gretchen B., 2013. "A big fish or a small pond? Framing effects in percentages," Organizational Behavior and Human Decision Processes, Elsevier, vol. 122(2), pages 190-199.
  • Handle: RePEc:eee:jobhdp:v:122:y:2013:i:2:p:190-199
    DOI: 10.1016/j.obhdp.2013.07.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0749597813000721
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.obhdp.2013.07.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Timothy B. Heath & Subimal Chatterjee & Karen R. France, 1995. "Mental Accounting and Changes in Price: The Frame Dependence of Reference Dependence," Post-Print hal-00670476, HAL.
    2. Dimitri, Carolyn & Greene, Catherine R., 2002. "Recent Growth Patterns In The U.S. Organic Foods Market," Agricultural Information Bulletins 33715, United States Department of Agriculture, Economic Research Service.
    3. Heath, Timothy B & Chatterjee, Subimal & France, Karen Russo, 1995. "Mental Accounting and Changes in Price: The Frame Dependence of Reference Dependence," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 22(1), pages 90-97, June.
    4. Tversky, Amos & Kahneman, Daniel, 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
    5. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    6. Subimal Chatterjee & Timothy B. Heath & Sandra J. Milberg & Karen R. France, 2000. "The differential processing of price in gains and losses: the effects of frame and need for cognition," Post-Print hal-00670450, HAL.
    7. Isaac M. Lipkus & Greg Samsa & Barbara K. Rimer, 2001. "General Performance on a Numeracy Scale among Highly Educated Samples," Medical Decision Making, , vol. 21(1), pages 37-44, February.
    8. Haipeng (Allan) Chen & Akshay R. Rao, 2007. "When Two Plus Two Is Not Equal to Four: Errors in Processing Multiple Percentage Changes," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 34(3), pages 327-340, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yan Sun & Barbara Mellers, 2016. "Trade-upgrade framing effects: Trades are losses, but upgrades are improvements," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 11(6), pages 582-588, November.
    2. Florin ANGHEL & Florin TÎRL?, 2014. "Evaluation Of Student’S Predispositions To Decision Making Biases," Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 8(1), pages 85-94, November.
    3. repec:cup:judgdm:v:11:y:2016:i:6:p:582-588 is not listed on IDEAS

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Choi, Pilsik & Coulter, Keith S., 2012. "It's Not All Relative: The Effects of Mental and Physical Positioning of Comparative Prices on Absolute versus Relative Discount Assessment," Journal of Retailing, Elsevier, vol. 88(4), pages 512-527.
    2. Scott B. Jackson & Paul A. Shoemaker & John A. Barrick & F. Greg Burton, 2005. "Taxpayers' Prepayment Positions and Tax Return Preparation Fees," Contemporary Accounting Research, John Wiley & Sons, vol. 22(2), pages 409-447, June.
    3. Friedrich, James & Lucas, Gale & Hodell, Emily, 2005. "Proportional reasoning, framing effects, and affirmative action: Is six of one really half a dozen of another in university admissions?," Organizational Behavior and Human Decision Processes, Elsevier, vol. 98(2), pages 195-215, November.
    4. Shi, Haijiao & Chen, Rong & Xu, Xiaobing, 2021. "How reward uncertainty influences subsequent donations: The role of mental accounting," Journal of Business Research, Elsevier, vol. 132(C), pages 383-391.
    5. Ying Zhu & Haipeng (Allan) Chen, 2017. "A tale of two brands: The joint effect of manufacturer and retailer brands on consumers’ product evaluation," Journal of Brand Management, Palgrave Macmillan, vol. 24(3), pages 284-306, May.
    6. Franses, Ph.H.B.F. & Vlam, A., 2011. "Financial innumeracy," Econometric Institute Research Papers EI 2011-01, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    7. Martín Egozcue & Sébastien Massoni & Wing-Keung Wong & RiÄ ardas Zitikis, 2012. "Integration-segregation decisions under general value functions: "Create your own bundle — choose 1, 2, or all 3!"," Documents de travail du Centre d'Economie de la Sorbonne 12057, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    8. Wen, Tong & Leung, Xi Y. & Li, Bin & Hu, Lingyan, 2021. "Examining framing effect in travel package purchase: An application of double-entry mental accounting theory," Annals of Tourism Research, Elsevier, vol. 90(C).
    9. Isabella, Giuliana & Pozzani, Alexandre Ierulo & Chen, Vinicios Anlee & Gomes, Murillo Buissa Perfi, 2012. "Influência dos anúncios de desconto sobre o comportamento dos consumidores," RAE - Revista de Administração de Empresas, FGV-EAESP Escola de Administração de Empresas de São Paulo (Brazil), vol. 52(6), November.
    10. Chu, Hsunchi & Liao, Shuling, 2010. "Buying while expecting to sell: The economic psychology of online resale," Journal of Business Research, Elsevier, vol. 63(9-10), pages 1073-1078, September.
    11. repec:cup:judgdm:v:14:y:2019:i:4:p:513-533 is not listed on IDEAS
    12. V. I. Yukalov & D. Sornette, 2014. "Manipulating decision making of typical agents," Papers 1409.0636, arXiv.org.
    13. Marco Bertini & Luc Wathieu, 2008. "Research Note—Attention Arousal Through Price Partitioning," Marketing Science, INFORMS, vol. 27(2), pages 236-246, 03-04.
    14. Azar, Ofer H., 2009. "Do consumers make too much effort to save on cheap items and too little to save on expensive items? experimental results and implications for business strategy," MPRA Paper 20962, University Library of Munich, Germany.
    15. Coker, Brent & Nagpal, Anish, 2013. "Building-Up versus Paring-Down: Consumer Responses to Recommendations When Customizing," Journal of Retailing, Elsevier, vol. 89(2), pages 190-206.
    16. Martín Egozcue & Sébastien Massoni & Wing-Keung Wong & Ričardas Zitikis, 2012. "Integration-segregation decisions under general value functions : "Create your own bundle -- choose 1, 2, or all 3 !"," Post-Print halshs-00747008, HAL.
    17. Kim Huat Goh & Jesse C. Bockstedt, 2013. "The Framing Effects of Multipart Pricing on Consumer Purchasing Behavior of Customized Information Good Bundles," Information Systems Research, INFORMS, vol. 24(2), pages 334-351, June.
    18. Dalla Costa, Aldo Fortunato & Mollica, Vito & Singh, Abhay, 2021. "Payment methods and the disposition effect: Evidence from Indonesian mutual fund trading," Journal of Behavioral and Experimental Finance, Elsevier, vol. 30(C).
    19. Ann Shawing Yang, 2015. "Lottery Payment Cards: A Study of Mental Accounting," Intelligent Systems in Accounting, Finance and Management, John Wiley & Sons, Ltd., vol. 22(3), pages 201-226, July.
    20. Kamleitner, Bernadette & Mandel, David R. & Dhami, Mandeep K., 2011. "Risky discounts: Do people prefer them on a per-item or per-purchase basis and why?," Journal of Economic Psychology, Elsevier, vol. 32(6), pages 951-961.
    21. Keith S. Coulter, 2013. "Commentary on: “an appraisal of behavioral price research (Part I)”," AMS Review, Springer;Academy of Marketing Science, vol. 3(3), pages 135-140, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jobhdp:v:122:y:2013:i:2:p:190-199. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/obhdp .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.