Framing effects in group investment decision making: role of group polarization

Prospect theory proposes that framing effects result in a preference for risk-averse choices in gain situations and risk-seeking choices in loss situations. However, in group polarization situations, groups show a pronounced tendency to shift toward more extreme positions than those they initially held. Whether framing effects in group decision making are more prominent as a result of the group-polarization effect was examined. Purposive sampling of 120 college students (57 men, 63 women; M age = 20.1 yr., SD = 0.9) allowed assessment of relative preference between cautious and risky choices in individual and group decisions. Findings indicated that both group polarization and framing effects occur in investment decisions. More importantly, group decisions in a gain situation appear to be more cautious, i.e., risk averse, than individual decisions, whereas group decisions in the loss situation appear to be more risky than individual decisions. Thus, group decision making may expand framing effects when it comes to investment choices through group polarization.     

Framing Effects and Choice Shifts in Group Decision Making

An experiment was conducted to examine the effects of framing on group decision-making. Decisions involving risk were posed in terms of either gains or losses to individual subjects. Subsequently, subjects were divided into groups and the decisions were presented again in either the same frame or the opposite frame. As hypothesized, when the same frame was presented to subjects both individually and in groups, individual-level framing effects became larger in groups; when the opposite frame was presented to groups, initial framing effects were reduced. However, these results were observed on only two of the four decision cases. On the other two cases, significant choice shifts occurred independently of the framing manipulations. Implications of these results for decision making groups in applied settings are discussed.     

Reflections of the self: how self‐esteem determines decision framing and increases risk taking

Historically, research examining the influence of individual personality factors on decision processing has been sparse. In this paper we investigate how one important individual aspect, self‐esteem, influences imposition and subsequent processing of ambiguously, negatively or positively framed decision tasks. We hypothesized that low self‐esteem individuals would impose a negative frame onto ambiguous decision problems and would be especially sensitive to negatively framed decision tasks. In Study 1 we utilized a self‐framing procedure and demonstrated that HSE participants were evenly divided in the hedonic valence they self‐imposed whereas LSE participants were more likely to self‐impose a negative frame. When these differences were accounted for, HSE and LSE participants were equivalent in risk seeking/avoiding choices. Study 2 used a risky‐choice framing task and found that LSE individuals were especially sensitive to the negative frame. Study 3, provided converging evidence and generalization of these findings to a reflection tasks involving money. Copyright © 2006 John Wiley & Sons, Ltd.     

Effects of problem frame and gender on principals’ decision making

Research indicates people’s decisions can sometimes be influenced by seemingly trivial differences in the framing (i.e., wording) of alternative options. The tendency to prefer risk averse options when framed positively and risky options when framed negatively is known as the framing effect. The current study examined the susceptibility of school principals to the framing effect. Additionally, analytical and intuitive decision styles, the degree to which one’s typical goal is to maximize (rather than satisfice), gender, and years of experience as a principal were measured to assess whether they are predictive of principals’ choices, and to test whether they moderate the effects of framing on choice. Seventy-one principals completed six decision problems (framed either positively or negatively) and instruments assessing decision style, typical decision goal, gender, and experience. Analyses demonstrated that principals are influenced by framing. Although the positively and negatively framed versions of the decision problems were objectively identical, negative framing resulted in more risky choices. Additionally, regardless of frame, men made more risky choices than women. There was no evidence that experience, decision style, or the degree to which one’s typical decision goal was to maximize, decreased framing effects. Several potential debiasing strategies are described, and limitations are noted.     

Framing Effects and Arenas of Choice: Your Money or Your Life?

This paper investigates the consistency of outcome framing effects on choice across two arenas of outcome: human life and money. Past research has yielded notable variability in the magnitude of framing effects. One possible contributor to the variation in magnitude is outcome arena. Past research has varied along this dimension without systematically assessing its effects. Undergraduates (N= 297) responded to three decision scenarios involving either human lives or money in which outcomes were framed either positively or negatively. Based on prospect theory, an interaction between framing and arena was predicted, such that a greater framing effect was expected in the human life arena (i.e., more risky choices were expected when outcomes involved human life than money in the negative frame and the reverse in the positive frame). Results were only partly consistent with this prediction. Regardless of frame, subjects made riskier choices when outcomes involved human lives rather than money. This was not expected for the positive frame. Even though human lives presumably have greater utility than dollars, subjects in the positive framing condition made riskier choices regarding human life than money. Additionally, no overall framing effect was observed. There was a significant sex by frame interaction such that only women exhibited framing effects on choice. This extends the finding of sex differences in framing to the monetary arena. This has important implications for the conduct of future studies on framing as well as for the interpretation of past and future framing research.     

认知闭合需要、框架效应与决策偏好

在带有模糊性的决策情境中,决策者个人的认知特征会对其判断决策产生重要影响。通过实验的方法,考察了认知闭合需要和特征框架效应对个体决策偏好的影响。93名工商管理硕士（MBA）参与了实验,研究的结果支持了本研究的3个假设,即认知闭合需要与特征框架效应不仅对被试的决策偏好存在显著的影响,而且二者还存在显著的交互作用。具体来说,研究发现,在模糊情境中：高认知闭合需要的被试偏好于立刻做出决策,而低认知闭合需要的被试偏好于暂缓做出决策;接收到正向框架信息的被试偏好于立刻做出决策,而接收到负向框架信息的被试偏好于暂缓做出决策;认知闭合需要与特征框架对被试的决策偏好还存在显著的交互作用。研究结论为根据个体认知闭合需要的水平来选拔决策者、利用框架效应来影响个体的信息加工方式进而提高决策质量提供了理论依据     

Enhanced Cardiac Perception Is Associated With Increased Susceptibility to Framing Effects

Previous studies suggest in line with dual process models that interoceptive skills affect controlled decisions via automatic or implicit processing. The “framing effect” is considered to capture implicit effects of task‐irrelevant emotional stimuli on decision‐making. We hypothesized that cardiac awareness, as a measure of interoceptive skills, is positively associated with susceptibility to the framing effect. Forty volunteers performed a risky‐choice framing task in which the effect of loss versus gain frames on decisions based on identical information was assessed. The results show a positive association between cardiac awareness and the framing effect, accounting for 24% of the variance in the framing effect. These findings demonstrate that good interoceptive skills are linked to poorer performance in risky choices based on ambivalent information when implicit bias is induced by task‐irrelevant emotional information. These findings support a dual process perspective on decision‐making and suggest that interoceptive skills mediate effects of implicit bias on decisions.     

The effects of discussion on group and individual choices among bets

The effects of discussion on subsequent group and individual choices are studied in a situation where subjects choose between a sure gain of varying amount and five probability levels associated with larger gains of expected value equal to that of the sure gain. At the end of the experiment, a single bet, chosen at random, is played for money. Before discussion, subjects have to guess the percentage of similar, more risky and more cautious choices made by their peers for each of the six bets. As predicted by a majority-rule decision-making model significant risky shifts were observed for relatively low values of sure gain. For higher values, however, groups tended to be more cautious than individuals. The final private choices of individuals were significantly more risky than their initial decisions. Most individuals apparently thought they were at least as risky as most others. This finding was due, however, primarily to the responses of subjects who chose the highest risk-level (the ceiling effect) and, secondly, to the consistent tendency of most individuals to guess that others make the same choices as they themselves. It is concluded that majority influence seems a satisfactory explanation of group risky shifts observed in the present study, but it cannot account for modifications of group and individual choices in all risk-taking situations.     

Decision framing: moderating effects of individual differences and cognitive processing

Two studies examined the effect of an individual difference variable, need for cognition (NC), and processing of the options on the occurrence of risky choice framing effects. In Study 1 (N=206), frame interacted with NC and math skill such that no framing effect was observed among those high in both NC and math skill. No effect was found for the processing manipulation of requesting a reason for one's choices. Study 2 (N=257) enhanced the processing of the problems by asking participants to write out the options as they would describe them to a friend. Results showed that frame interacted with NC and depth of processing such that no framing effect was observed among those high in NC who were in the deep processing condition. These findings suggest that NC and depth of processing need to be considered in concert in order to understand their moderating effects on framing. Copyright © 2004 John Wiley & Sons, Ltd.     

The effect of normative models on individual and group choice

Studied the effect of a normative model (maximization of expected value) upon group and individual choice. 109 MBA students in a Lain square research design chose between two alternatives differing in expected value and in range of outcomes. Group choices were significantly (p < .05) closer to those predicted by the normative model than were individual choices. This difference was not due only to information about the presence and applicability of the normative model but rather it was due to the persuasiveness of the model in a group as a cogent and correct solution to the choice dilemma. Task instructions emphasizing the rewards from risk taking produced significantly more choices (p < .05) of the riskier alternative, particularly by individuals as opposed to groups, than did instructions emphasizing the penalties of risk taking. ‘Risky’ and ‘conservative’ shifts in choice between groups and individuals were explicable through knowledge of the influence of the normative model in individual and group choice.     

Framing decisions: Hypothetical and real

This paper addresses the general issue of whether the practice of investigating human decision making in hypothetical choice situations is at all warranted, or under what conditions. A particularly relevant factor that affects the match between real decisions and hypothetical decisions is the importance of a decision’s consequences. In the literature experimental gambles tend to confound the reality of the decision situation with the size of the payoffs: hypothetical decisions tend to offer large payoffs, and real decisions tend to offer only small payoffs. Using the well-known framing effect (a tendency of risk-aversion for gains and of risk-seeking for losses) we find that the framing effect depends on payoff size but hypothetical choices match real choices for small as well as large payoffs. These results appear paradoxical unless size of incentive is clearly distinguished from the reality status of decision (real versus hypothetical). Since the field lacks a general theory of when hypothetical decisions match real decisions, the discussion presents an outline for developing such a theory.     

Dispositional optimism,self‐framing and medical decision‐making

Self‐framing is an important but underinvestigated area in risk communication and behavioural decision‐making, especially in medical settings. The present study aimed to investigate the relationship among dispositional optimism, self‐frame and decision‐making. Participants (N = 500) responded to the Life Orientation Test‐Revised and self‐framing test of medical decision‐making problem. The participants whose scores were higher than the middle value were regarded as highly optimistic individuals. The rest were regarded as low optimistic individuals. The results showed that compared to the high dispositional optimism group, participants from the low dispositional optimism group showed a greater tendency to use negative vocabulary to construct their self‐frame, and tended to choose the radiation therapy with high treatment survival rate, but low 5‐year survival rate. Based on the current findings, it can be concluded that self‐framing effect still exists in medical situation and individual differences in dispositional optimism can influence the processing of information in a framed decision task, as well as risky decision‐making.     

Framing Effects: Dynamics and Task Domains

The author examines the mechanisms and dynamics of framing effects in risky choices across three distinct task domains (i.e., life–death, public property, and personal money). The choice outcomes of the problems presented in each of the three task domains had a binary structure of a sure thing vs a gamble of equal expected value; the outcomes differed in their framing conditions and the expected values, raging from 6000, 600, 60, to 6, numerically. It was hypothesized that subjects would become more risk seeking, if the sure outcome was below their aspiration level (the minimum requirement). As predicted, more subjects preferred the gamble when facing the life–death choice problems than facing the counterpart problems presented in the other two task domains. Subjects’ risk preference varied categorically along the group size dimension in the life–death domain but changed more linearly over the expected value dimension in the monetary domain. Framing effects were observed in 7 of 13 pairs of problems, showing a positive frame–risk aversion and negative frame–risk seeking relationship. In addition, two types of framing effects were theoretically defined and empirically identified. Abidirectional framing effectinvolves a reversal in risk preference, and occurs when a decision maker's risk preference is ambiguous or weak. Four bidirectional effects were observed; in each case a majority of subjects preferred the sure outcome under a positive frame but the gamble under a negative frame. In contrast, aunidirectional framing effectrefers to a preference shift due to the framing of choice outcomes: A majority of subjects preferred one choice outcome (either the sure thing or the gamble) under both framing conditions, with positive frame augmented the preference for the sure thing and negative frame augmented the preference for the gamble. These findings revealed some dynamic regularities of framing effects and posed implications for developing predictive and testable models of human decision making.     

Social cues and verbal framing in risky choice

We examined how people use social and verbal cues of differing priorities in making social decisions. In Experiment 1, formally identical life – death choice problems were presented in different hypothetical group contexts and were phrased in either a positive or negative frame. The risk‐seeking choice became more dominant as the number of kin in an endangered group increased. Framing effects occurred only in a heterogeneous group context where the lives at risk were a mixture of kin and strangers. No framing effect was found when the same problem was presented in the context of a homogeneous group consisting of either all kin or all strangers. We viewed the framing effects to be a sign of indecisive risk preference due to the differential effects of a kinship cue and a stranger cue on choice. In Experiment 2, we presented the life – death problem in two artificial group contexts involving either 6 billion human lives or 6 billion extraterrestrial lives. A framing effect was found only in the human context. Two pre‐conditions of framing effects appear to be social unfamiliarity of a decision problem and aspiration level of a decision maker. In Experiment 3, we analyzed the direction of the framing effect by balancing the framing. The direction of the framing effect depended on the baseline level of risk preference determined by a specific decision context. Copyright © 2001 John Wiley & Sons, Ltd.     

右侧颞顶联合区及道德加工脑网络的功能连接预测社会性框架效应：来自静息态功能磁共振的证据

社会性框架效应指个体进行社会性决策时, 描述方式(即框架)对其选择倾向的影响。采用“伤害/帮助框架”范式, 本研究在行为上发现了显著的框架效应：被试在伤害框架下比帮助框架下, 更倾向于选择利他选项, 这可能是由于伤害框架凸显了伤害他人的后果及有意性, 从而提高了道德冲突水平。在神经活动上发现(1)静息态下, 右侧颞顶联合区(TPJ)的低频振荡振幅(ALFF)与框架效应强度存在显著正相关; (2)道德加工相关脑区构成的局部脑网络内部的功能连接强度(FC)能够有效预测框架效应强度。本研究首次利用静息态功能连接探讨个体的社会性决策受到语言表述方式影响的神经机制, 为进一步揭示社会决策中的个体差异提供了神经学证据。     

Post-decision consolidation in large group decision-making

Decision-makers tend to change the psychological attractiveness of decision alternatives in favor of their own preferred alternative after the decision is made. In two experiments, the present research examined whether such decision consolidation occurs also among individual group members in a large group decision-making situation. High-school students were presented with a decision scenario on an important issue in their school. The final decision was made by in-group authority, out-group authority or by majority after a ballot voting. Results showed that individual members of large groups changed the attractiveness of their preferred alternative from a pre- to a post-decision phase, that these consolidation effects increased when decisions were made by in-group members, and when participants identified strongly with their school. Implications of the findings for understanding of group behavior and subgroup relations are discussed.     

情绪和任务框架对自我和预期他人决策时风险偏好的影响

两个实验考察了情绪和任务框架对自我和预期他人决策时风险偏好的影响。结果表明:(1)获益框架下,悲伤情绪比愉悦情绪诱发更强的风险偏好,自我决策比预期他人决策表现出更强的风险偏好;(2)损失框架下,愉悦情绪比悲伤情绪诱发更强的风险偏好,预期他人决策比自我决策表现出更强的风险偏好;(3)在自我决策时,愉悦情绪在损失框架下比在获益框架下诱发了更强的风险偏好,悲伤情绪在获益框架下比在损失框架下诱发了更强的风险偏好;在预期他人决策时,无论是愉悦情绪还是悲伤情绪,损失框架均比获益框架诱发了更强的风险偏好。     

Group Ethical Decision Making Process in Chinese Business: Analysis From Social Decision Scheme and Cultural Perspectives

Literature concerning group ethical decision making in a business setting has traditionally focused on directly comparing group versus individual decisions and then investigating differences. Analysis of the interactive process of group ethical decision making appears sparse. This study addresses the gap by investigating group decision making from a social decision scheme (SDS) perspective in a Chinese cultural setting. A cohort of Chinese accountancy students evaluated ethical business scenarios individually and then in a group context. Group responses could be explained in terms of both the SDS and the Chinese cultural perspective (zhongyong). Specifically, groups did not select the most ethical choice but rather the most moderate of all choices advocated by the majority (zhongyong). These results show the application of SDS theory in a culturally specific (Chinese) environment and note the impact of culturally specific factors (zhongyong) on business decision making. The implications are significant for business. If ethical decisions are entrusted to groups, the impact of culturally specific factors must be fully appreciated in evaluating the final decision.     

A New Look at Framing Effects: Distribution of Effect Sizes,Individual Differences,and Independence of Types of Effects

Levin, Schneider, and Gaeth (1998) identified three distinct types of framing effects in the literature: attribute framing effects, goal framing effects, risky choice framing effects. While most previous framing studies used between-subjects manipulations of frame, the present study used two sessions, spaced one week apart, to give each of 102 participants both framing conditions and all three types of framing. Using the difference between the score for the positive framing condition and the negative framing condition as the unit of analysis for each type of framing effect, the following were found: (1) reliable framing effects for attribute framing and risky choice framing, but not for goal framing; (2) distributions of individual framing effects showing that the aggregate-level effects were representative of individuals even though some individuals showed no framing effects; (3) no significant interdependencies between the three categories of framing effects; (4) individual differences in reaction to the task scenarios related to various of the “Big Five” personality traits as well as the Faith in Intuition scale. The use of within-subject designs to assess individual differences in decision-making phenomena such as framing effects and other biases and heuristics is recommended for future research.     

Context effects on group-based employee selection decisions

The decoy effect occurs when preferences between two alternatives reverse as a result of the manipulation of a third alternative (i.e., a decoy) such that it is dominated by only one of the two original alternatives. Previous research has demonstrated this effect in employee selection decisions, but only when decisions were made by individuals. The present investigation was designed to test the generalizability of the phenomenon to decisions made by groups, and to determine the influence of process and outcome accountability on the decoy effect. Results showed that the overall decoy effect held for both individual and group decisions. However, for both individuals and groups, the decoy effect held only when decision makers knew they would have to justify their decision processes.