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Positional concerns and framing effects in financial preferences

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  • Barbara, Latifa
  • Grolleau, Gilles
  • Houfaf Khoufaf, Assia
  • Meriane, Youcef
  • Mzoughi, Naoufel

Abstract

We examine the relevance of relative standings in the financial domain. We introduced innovative hypotheses by testing whether framing (gain versus loss, risk level, amounts versus percentage, and money origin) affects stated positional preferences. Based on a quasi-experimental survey in Algeria (North Africa), our results show that while egalitarian concerns are prevalent in financial preferences among participants, positional and absolute states are also selected by a significant proportion of respondents. We also found some support to the insight that positional preferences are affected by framing, since loss/gain and risk framings are found to be significant. In other words, the proportion of respondents having positional preferences was found to be significantly higher in the gain (respectively, risky) framing, compared to a symmetric loss (respectively, certain) situation.

Suggested Citation

  • Barbara, Latifa & Grolleau, Gilles & Houfaf Khoufaf, Assia & Meriane, Youcef & Mzoughi, Naoufel, 2018. "Positional concerns and framing effects in financial preferences," The Quarterly Review of Economics and Finance, Elsevier, vol. 68(C), pages 183-189.
    • Handle: RePEc:eee:quaeco:v:68:y:2018:i:c:p:183-189
    DOI: 10.1016/j.qref.2017.09.002
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    7. 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..
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    Cited by:

    1. Dib-Slamani, Hind & Grolleau, Gilles & Mzoughi, Naoufel, 2022. "Robbing a robber is not robbing," The Quarterly Review of Economics and Finance, Elsevier, vol. 85(C), pages 1-7.
    2. Fan, Wen & Zhang, Lifang, 2020. "Examining framing effect when subject's perspective matters: Evidence from China," Finance Research Letters, Elsevier, vol. 35(C).

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    More about this item

    Keywords

    Algeria; Financial preferences; Framing; Positional concerns;
    All these keywords.

    JEL classification:

    • D0 - Microeconomics - - General
    • D1 - Microeconomics - - Household Behavior

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