The Framing Effect of Decision Making

The body of utility theoryUtility theory that explains the phenomenon of decision makingDecision making has developed new theories such as nonlinear utility theoryNonlinear utility theory to explain decision making under uncertaintyUncertainty. There is, however, a phenomenon called the framing effectFraming effect which cannot be explained in its essence by the body of utility theoryUtility theory. The framing effect refers to phenomena in which preference is reversed even for the same decision makingDecision making problem because of changes in perspectives resulting from differences in the linguistic expressionsLinguistic expression used to describe the decision making problem, resulting in varied results of decision making. This chapter reports the findings of studies of behavioral decision-making theory, including the reasons underlying the inability of utility theoryUtility theory to explain the framing effectFraming effect, the observed intensity of the framing effectFraming effect, and the types of factors affecting the framing effect.