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.     

迫选规则体验法: 检验规范性和描述性风险决策理论的新尝试

为寻求检验规范性和描述性风险决策理论的通用标准, 本研究以期望价值理论和齐当别抉择模型为例, 探讨了“迫选规则体验法”的适用性。被试为120名大学生, 实验任务为要求被试分别完成自主决策(采用未知规则: 真规则)和规则迫选决策(遵循给定规则: 假规则)任务, 并对决策后的情感和认可程度进行评定。研究发现: (1) 被试在自主决策条件下比在规则迫选条件下体验到的正性情感程度更强, 负性情感的程度更弱; (2) 被试在自主决策与规则迫选决策两种条件下做出的相同决策越多, 该被试对迫选规则更加认可并体验到的正性情感程度越强, 负性情感的程度越弱; (3) 与期望价值理论相比, 齐当别抉择模型可能符合更多决策者的实际决策规则。这些结果表明, 作为检验规范性和描述性风险决策理论的新尝试, 迫选规则体验法可能更有助于回答“决策者实际采用的决策规则是什么”的问题。     

风险敏感理论:需要驱动风险决策

风险敏感理论由研究动物觅食行为发展而来,提出有机体在有需要的状况下会出现从风险规避到风险寻求的行为,是风险决策领域内的一种生物学理论。目前风险敏感理论所做出的预测在动物和人类身上都获得了大量实证研究的支持,表明该理论可以解释很多领域中的风险决策。因此有必要对这一理论做一个系统的论述,包括对其理论来源和数学模型的发展演变进行梳理;从参照点等不同的角度分析该理论与其他决策理论的区别;并且,风险敏感理论也为经济不平等和权力等外部因素下的风险转移提供了解释,对已有研究做出了独特的贡献。     

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     

Dual processes in decision making and developmental neuroscience: A fuzzy-trace model

From Piaget to the present, traditional and dual-process theories have predicted improvement in reasoning from childhood to adulthood, and improvement has been observed. However, developmental reversals—that reasoning biases emerge with development—have also been observed in a growing list of paradigms. We explain how fuzzy-trace theory predicts both improvement and developmental reversals in reasoning and decision making. Drawing on research on logical and quantitative reasoning, as well as on risky decision making in the laboratory and in life, we illustrate how the same small set of theoretical principles apply to typical neurodevelopment, encompassing childhood, adolescence, and adulthood, and to neurological conditions such as autism and Alzheimer’s disease. For example, framing effects—that risk preferences shift when the same decisions are phrased in terms of gains vs. losses—emerge in early adolescence as gist-based intuition develops. In autistic individuals, who rely less on gist-based intuition and more on verbatim-based analysis, framing biases are attenuated (i.e., they outperform typically developing control subjects). In adults, simple manipulations based on fuzzy-trace theory can make framing effects appear and disappear depending on whether gist-based intuition or verbatim-based analysis is induced. These theoretical principles are summarized and integrated in a new mathematical model that specifies how dual modes of reasoning combine to produce predictable variability in performance. In particular, we show how the most popular and extensively studied model of decision making—prospect theory—can be derived from fuzzy-trace theory by combining analytical (verbatim-based) and intuitive (gist-based) processes.     

"Leaky" Rationality: How Research on Behavioral Decision Making Challenges Normative Standards of Rationality

ABSTRACT— For more than 30 years, decision-making research has documented that people often violate various principles of rationality, some of which are so fundamental that theorists of rationality rarely bother to state them. We take these characteristics of decision making as a given but argue that it is problematic to conclude that they typically represent departures from rationality. The very psychological processes that lead to "irrational" decisions (e.g., framing, mental accounting) continue to exert their influence when one experiences the results of the decisions. That is, psychological processes that affect decisions may be said also to "leak" into one's experience. The implication is that formal principles of rationality do not provide a good enough normative standard against which to assess decision making. Instead, what is needed is a substantive theory of rationality—one that takes subjective experience seriously, considers both direct and indirect consequences of particular decisions, considers how particular decisions fit into life as a whole, and considers the effects of decisions on others. Formal principles may play a role as approximations of the substantive theory that can be used by theorists and decision makers in cases in which the formal principles can capture most of the relevant considerations and leakage into experience is negligible.     

The foreign-language effect: thinking in a foreign tongue reduces decision biases

Would you make the same decisions in a foreign language as you would in your native tongue? It may be intuitive that people would make the same choices regardless of the language they are using, or that the difficulty of using a foreign language would make decisions less systematic. We discovered, however, that the opposite is true: Using a foreign language reduces decision-making biases. Four experiments show that the framing effect disappears when choices are presented in a foreign tongue. Whereas people were risk averse for gains and risk seeking for losses when choices were presented in their native tongue, they were not influenced by this framing manipulation in a foreign language. Two additional experiments show that using a foreign language reduces loss aversion, increasing the acceptance of both hypothetical and real bets with positive expected value. We propose that these effects arise because a foreign language provides greater cognitive and emotional distance than a native tongue does.     

Risk-sensitivity: crossroads for theories of decision-making

Most actions result in one of a set of possible outcomes. To understand how this uncertainty, or risk, affects animals' decision-making some researchers take a normative approach, asking how an animal should respond to risk if it is maximizing its fitness. Others focus on predicting responses to risk by generalizing from regularities in behavioural data, without reference to cognitive processes. Yet others infer cognitive processes from observed behaviour and ask what actions are predicted when these processes interact with risk. The normative approach (Risk-sensitivity Theory; RST) is unique in predicting a shift in a subject's response to risk as a function of its resource budget, but the predictions of this theory are not yet widely confirmed. In fact, evidence suggests a strong bias towards risk-proneness when delay to reward is risky and risk-aversion when amount of reward is risky, a pattern not readily explained by RST. Extensions of learning theory and of Scalar Expectancy Theory provide process-based explanations for these findings but do not handle preference shifts or provide evolutionary justification for the processes assumed. In this review we defend the view that risk-sensitivity must be studied with theoretical plurality.     

任务框架、损益值大小对自恋者风险偏好的影响

以234名大学生为被试,探讨了任务框架、损益值大小对显性/隐性自恋者风险偏好的影响。结果表明：(1)框架效应较稳定的出现在中等风险水平情境下,且在大损益值条件下更易出现。(2)在获益框架下,被试为小金额决策更冒险,在损失框架下,则为大金额决策更冒险。(3)在损失框架下,高显性自恋者比低显性自恋者更为冒险,在获益框架下,高隐性自恋者比低隐性自恋者更为保守;高隐性自恋者的风险偏好受到任务框架和损益值大小的共同影响。     

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.     

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.     

All Frames Are Not Created Equal: A Typology and Critical Analysis of Framing Effects

Accentuate the positive or accentuate the negative? The literature has been mixed as to how the alternative framing of information in positive or negative terms affects judgments and decisions. We argue that this is because different studies have employed different operational definitions of framing and thus have tapped different underlying processes. We develop a typology to distinguish between three different kinds of valence framing effects. First we discuss the standard risky choice framing effect introduced by Tversky and Kahneman (1981) to illustrate how valence affects willingness to take a risk. Then we discuss attribute framing, which affects the evaluation of object or event characteristics, and goal framing, which affects the persuasiveness of a communication. We describe the distinctions, provide a number of examples of each type, and discuss likely theoretical mechanisms underlying each type of framing effect. Our typology helps explain and resolve apparent confusions in the literature, ties together studies with common underlying mechanisms, and serves as a guide to future research and theory development. We conclude that a broader perspective, focused on the cognitive and motivational consequences of valence-based encoding, opens the door to a deeper understanding of the causes and consequences of framing effects.     

Embracing Chance Tactically: A Different Perspective on Risk Taking

Although they value certainty, people are willing to take risks to avoid losses. Consequently, they are risk‐seeking in the domain of losses but risk‐avoidant in the domain of gains. This behavior, frequently demonstrated in framing experiments, is traditionally explained in terms of prospect theory. We suggest a different account whereby involving chance in one's decisions may serve a strategic impression‐formation function. In the domain of losses actors may embrace chance to distance themselves from the outcomes and deflect possible blame. Given potential gains, however, actors may avoid uncertainty to enhance their association with valued outcomes. We test this idea by manipulating the level of actors' personal responsibility for the decision outcomes. The results of four studies consistently showed that when personal responsibility is high, the original framing effect is replicated (i.e., greater risk‐taking when choices are framed in terms of losses rather than gains). However, when because of assigned role or decision circumstances, actors experience low personal responsibility for the outcomes, and the classic framing effect is eliminated. Copyright © 2016 John Wiley & Sons, Ltd.     

An information processing view of framing effects: The role of causal schemas in decision making

People prefer a sure gain to a probable larger gain when the two choices are presented from a gain perspective, but a probable larger loss to a sure loss when the objectively identical choices are presented from a loss perspective. Such reversals of preference due to the context of the problem are known asframing effects. In the present study, schema activation and subjects’ interpretations of the problems were examined as sources of the framing effects. Results showed that such effects could be eliminated by introducing into a problem a causal schema that provided a rationale for the reciprocal relationship between the gains and the losses. Moreover, when subjects were freed from framing they were consistently risk seeking in decisions about human life, but risk averse in decisions about property. Irrationality in choice behaviors and the ecological implication of framing effects are discussed.