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Framing, Information, and Welfare

Author

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  • Andrew Caplin
  • Daniel J. Martin

Abstract

Consumers often face an overwhelming amount of information when deciding between products, and one of the primary policymaking tools available to improve their informativeness is the framing of this information. We introduce a general theoretical approach that characterizes when one frame is revealed to provide robustly higher welfare than another. Because it is testable, adaptable, and both necessary and sufficient, our condition determines both whether frames are robustly welfare ranked in a particular data set and the overall proportion of data sets in which frames can be so ranked.

Suggested Citation

  • Andrew Caplin & Daniel J. Martin, 2020. "Framing, Information, and Welfare," NBER Working Papers 27265, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:27265
    Note: EH IO PE TWP
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    References listed on IDEAS

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    Cited by:

    1. Ginger Zhe Jin & Michael Luca & Daniel Martin, 2022. "Complex Disclosure," Management Science, INFORMS, vol. 68(5), pages 3236-3261, May.

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    More about this item

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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