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The Role of Cognitive Effort in Framing Effects

Author

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  • Krzysztof Przybyszewski

    (Akademia Leona Koźmińskiego)

  • Dorota Rutkowska

    (Uniwersytet Warszawski)

Abstract

Framing effects are a common bias in people making risky decisions. The account for this bias is found in the loss aversion derived from Prospect Theory. Most often in the decision making literature this is the effortful processes that are claimed to reduce framing effects in risky choice tasks i.e. investing of mental effort should de-bias the decision makers. However, in goal framing studies, effortful mental processes may produce those effects. In our experiment participants were primed with either effortful or effortless modes of processing before a classical Asian Disease scenario. As hypothesised, framing effects were obtained only through effortful processing. This suggests the effortful and reflective nature of framing effects.

Suggested Citation

  • Krzysztof Przybyszewski & Dorota Rutkowska, 2013. "The Role of Cognitive Effort in Framing Effects," Collegium of Economic Analysis Annals, Warsaw School of Economics, Collegium of Economic Analysis, issue 32, pages 107-119.
    • Handle: RePEc:sgh:annals:i:32:y:2013:p:107-119
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    References listed on IDEAS

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    1. 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..
    2. Mandel, David R., 2001. "Gain-Loss Framing and Choice: Separating Outcome Formulations from Descriptor Formulations," Organizational Behavior and Human Decision Processes, Elsevier, vol. 85(1), pages 56-76, May.
    3. Kuhberger, Anton & Schulte-Mecklenbeck, Michael & Perner, Josef, 1999. "The Effects of Framing, Reflection, Probability, and Payoff on Risk Preference in Choice Tasks, ," Organizational Behavior and Human Decision Processes, Elsevier, vol. 78(3), pages 204-231, June.
    4. Shane Frederick, 2005. "Cognitive Reflection and Decision Making," Journal of Economic Perspectives, American Economic Association, vol. 19(4), pages 25-42, Fall.
    5. Sieck, Winston & Yates, J. Frank, 1997. "Exposition Effects on Decision Making: Choice and Confidence in Choice," Organizational Behavior and Human Decision Processes, Elsevier, vol. 70(3), pages 207-219, June.
    6. Levin, Irwin P. & Schneider, Sandra L. & Gaeth, Gary J., 1998. "All Frames Are Not Created Equal: A Typology and Critical Analysis of Framing Effects," Organizational Behavior and Human Decision Processes, Elsevier, vol. 76(2), pages 149-188, November.
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