Academic journal article Social Behavior and Personality: an international journal

Effect of Framing on Risky Choice: One Case Study in China

Academic journal article Social Behavior and Personality: an international journal

Effect of Framing on Risky Choice: One Case Study in China

Article excerpt

The effect of framing on Chinese undergraduates was explored using Tversky and Kahneman's (1981) well-known Asian Disease Problem. Participants were divided into three groups with different formats: positive, negative, and balanced format, respectively. There was a significant difference between the Chinese sample and Tversky and Kahneman's American sample under positive format, but no difference under the negative format. Chinese students were more prone to risky options. Results of the Chinese sample showed that the type of framing effect was unidirectional, characterized by predominant risk seeking under both framing conditions, with more risk seeking under the negative frame than the positive frame. The framing effect was evaluated using the balanced format condition as an objective measure of the existing risk preference. Results suggest that the military participants were influenced by both positive format and negative format, and in the Chinese civil sample the negative format had an important effect. These findings expand the literature on risk decision by demonstrating the framing effect and comparing results from Chinese and American participants.

Keywords: framing effect, balanced format, Chinese sample, risk taking, military undergraduates.

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Many people feel confident that they answer questions or make decisions according to their beliefs. However, results from a variety of studies suggest that judgments and decision making are affected by the way in which a problem is framed. Since the pioneering studies by Kahneman and Tversky (1979; Tversky & Kahneman, 1981), the issue of framing has been of paramount interest in many different areas of decision making (Kuhberger, 1998). Research has reported both the theoretical components of framing and its applications in various areas, such as medical decisions (e.g., Siminoff & Fetting, 1989), bargaining behaviors (e.g., Neale & Bazerman, 1985), health behaviors (e.g., Mann, Sherman, & Updegraff, 2004; O'Connor, Ferguson, & O'Connor, 2005) and social and personal judgments (e.g., Levin, Schnittjer, & Thee, 1988).

The classic example involves the Asian Disease Problem which was used by Tversky and Kahneman (1981). The problem states that the US is preparing for the outbreak of an unusual disease which is expected to kill 600 people, and that two options are described in the following way. (1) If program A is adopted, 200 people will be saved (400 people will die). (2) If program B is adopted, there is 1/3 probability that 600 people will be saved (nobody will die) and 2/3 probability that no people will be saved (600 people will die). In each condition, people are required to make a choice between the sure thing and the risky choice. Results showed that people were risk-averse in the positive (survival) condition but risk-seeking in the negative (mortality) condition. Although the two problems are formally identical, the preferences tend to be quite different. That is, they are more apt to take risks to avoid a loss than to achieve a gain.

Framing effect refers to the finding that decision makers respond differently to different but objectively equivalent descriptions of the same problem (Levin, Schneider, & Gaeth, 1998, p. 50). A framing effect, such as the one found in the Asian disease problem, is often explained using Kahneman and Tversky's prospect theory (1979). Generally, people code the possible choice outcomes as gains and losses, and tend to be risk-averse when choosing among prospects seen as gains but risk-seeking when choosing among prospects seen as losses. Thus, when the choice options are framed positively, a decision maker tends to perceive them as gains and becomes more risk-averse. In contrast, when the same choice options are framed negatively, a decision maker tends to perceive them as losses and becomes more risk-seeking.

However, scholars attempting to replicate Tversky and Kahneman's Asian disease experiment have had mixed success. …

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