Effects of valence and framing in decision-making: Assessing decision-makers' perceived domains of choice

Abstract: In comparison between choice alternatives, judgments of “How much better is a preferred option?” and “How much worse is a less preferred option?” may differ in their magnitudes. Such discrepancies are called “valence effects”. Previously, Yamagishi and Miyamoto (1996 ) observed systematic positive valence effects (“Better” exceeding “Worse”) in the domain of gains and systematic negative valence effects (“Worse” exceeding “Better”) in the domain of losses. The current experiments used the directions of valence effects as a tool to assess decision‐maker's interpretation of choice tasks under “framing effects” ( Tversky & Kahneman, 1986 ). Preferences under the framing effect switch from certain options in the domain of gains to uncertain options in the domain of losses. Two experiments showed that preferences for certain options were associated with positive valence effects, whereas preferences for uncertain options were associated with negative valence effects. Moreover, conditions wherein the framing manipulations lose the effectiveness were examined. Valence effects showed that framing effects ceased to occur when decision‐makers maintained consistent domain perceptions as pertaining to gains or to losses, across the domains of gains and losses. Implications are discussed.