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Are Experimental Economists Prone to Framing Effects? A Natural Field Experiment
Abstract
An extensive literature demonstrates the existence of framing effects in the laboratory and in questionnaire studies. This paper reports new evidence from a natural field experiment using a subject pool one may consider as particularly resistant to such effects: experimental economists. We find that while the behaviour of junior experimental economists is affected by the description of the decision task they face, this is not the case for the more senior members of our subject pool.
... Furthermore, the attribute framing effect is found in contexts of plea bargaining (Bibas, 2004) and among economists (Gächter et al., 2009). The analysis of plea-bargaining literature has brought up the effect of framing on the criminal justice system (Bibas, 2004). ...
... The effect of framing appears to be a crucial component in the process, although skillful lawyering may ameliorate its effect. Similarly, the framing effect of conference payment for the participants of a scientific conference for behavioral economics has been studied (Gächter et al., 2009). The results showed that while the junior experimental economics was influenced by the framing effect, the more senior economists were not (Gächter et al., 2009). ...
... Similarly, the framing effect of conference payment for the participants of a scientific conference for behavioral economics has been studied (Gächter et al., 2009). The results showed that while the junior experimental economics was influenced by the framing effect, the more senior economists were not (Gächter et al., 2009). In a similar vein, people who are knowledgeable about an attribute's distribution (i.e., what is the typical number of free throws scored per season by an athlete playing basketball in the NBA) exhibited a reduced framing effect in the basketball framing scenario. ...
The human brain has evolved to solve the problems it encounters in multiple environments. In solving these challenges, it forms mental simulations about multidimensional information about the world. These processes produce context-dependent behaviors. The brain as overparameterized modeling organ is an evolutionary solution for producing behavior in a complex world. One of the most essential characteristics of living creatures is that they compute the values of information they receive from external and internal contexts. As a result of this computation, the creature can behave in optimal ways in each environment. Whereas most other living creatures compute almost exclusively biological values (e.g., how to get food), the human as a cultural creature computes meaningfulness from the perspective of one’s activity. The computational meaningfulness means the process of the human brain, with the help of which an individual tries to make the respective situation comprehensible to herself to know how to behave optimally. This paper challenges the bias-centric approach of behavioral economics by exploring different possibilities opened up by computational meaningfulness with insight into wider perspectives. We concentrate on confirmation bias and framing effect as behavioral economics examples of cognitive biases. We conclude that from the computational meaningfulness perspective of the brain, the use of these biases are indispensable property of an optimally designed computational system of what the human brain is like. From this perspective, cognitive biases can be rational under some conditions. Whereas the bias-centric approach relies on small-scale interpretable models which include only a few explanatory variables, the computational meaningfulness perspective emphasizes the behavioral models, which allow multiple variables in these models. People are used to working in multidimensional and varying environments. The human brain is at its best in such an environment and scientific study should increasingly take place in such situations simulating the real environment. By using naturalistic stimuli (e.g., videos and VR) we can create more realistic, life-like contexts for research purposes and analyze resulting data using machine learning algorithms. In this manner, we can better explain, understand and predict human behavior and choice in different contexts.
... In lab studies, the differences between loss and gain framings have been found to be especially relevant for risk-taking decisions (Tversky and Kahneman 1981). Our paper, contributes to the field studies literature on framing effects (Ganzach and Karsahi 1995;Gächter et al. 2009;Arceneaux and Nickerson 2010;Bertrand et al. 2010;Fryer et al. 2012;Hossain and List 2012;Levitt et al. 2016;Hoffmann and Thommes 2020). Field studies on this topic have focused on studying whether the effectiveness of persuasive communication or incentives changes whenever framed as a loss or as a gain. ...
... By contrast, Hoffmann and Thommes (2020) found that Loss-framing backfires in motivating energy-efficient driving, List and Samek (2015) found no effect in fostering healthy food choices and Arceneaux and Nickerson (2010) find no framing effects in the context of political advertising. Gächter et al. (2009) found that only junior participants reacted to framing when early registration prices were presented either as a loss or a gain in a conference. In contrast to these works, we study framing in the domain of risky choices which, as explained above, has been widely investigated in the lab but not in the field. ...
We exploit testing data to gain better understanding on framing effects on decision-making and performance under risk. In a randomized field experiment, we modified the framing of scoring rules for penalized multiple-choice tests. In penalized multiple-choice tests, right answers are typically framed as gains while wrong answers are framed as losses (Mixed-framing). In the Loss-framing proposed, both non-responses and wrong answers are presented in a loss domain. According to our theoretical model, we expect the change in the framing to decrease students’ non-response and to increase students’ performance. Under the Loss-framing, students’ non-response reduces by a 18%-20%. However, it fails to increase students’ scores. Indeed, our results support the possibility of impaired performance in the Loss-framing.
... Negative consequences or harms can be obtained by delivering aversive outcomes, by withholding positive outcomes, and by withdrawing positively valued resources. Framing effects have been explored in numerous experiments across many disciplines with a variety of decision scenarios (for reviews see e.g., Gächter et al., 2009;Gilovich et al., 2002;Kahneman et al., 1982;Kühberger, 1998;Levin et al., 1998;Steiger & Kühberger, 2018). Surprisingly few studies have been conducted to investigate the influence of frames on accepting or rejecting prioritization criteria. ...
Global pandemics, social and scientific developments such as growing and aging populations, novel and expensive health technologies, and improved medical treatments increase the demand for healthcare services and challenge healthcare systems worldwide. Prioritizing healthcare services according to some pre-defined criteria such as age, health behavior, and social responsibility has been proposed for distributing limited resources. A major concern in healthcare policies is establishing fair and legitimized procedures for distributing scarce healthcare resources. Ways of legitimizing prioritization criteria in terms of fairness and justice are, for instance, drawing on theoretical considerations such as (normative) distributive justice principles, like equity, equality, and need, mostly relying on experts’ opinions; or using more practical approaches such as direct-democracy-like elements, i.e., including the general public in decisions on prioritizing scarce healthcare resources. For the latter, opinions and preferences of those are typically elicited by offering them survey questionnaires. However, past research has shown that participants’ preferences may be influenced by how the questionnaire is constructed and items are phrased and framed. This chapter discusses the impact of framing on attitudes toward prioritization criteria in healthcare service. In particular, questions are framed in terms of providing and withholding services. By combining psychological theory on judgment and decision-making with recent empirical findings and previous research, we show that the effect of framing on people’s preferences for healthcare prioritization criteria is an essential factor that healthcare policymakers may want to consider when using elements of direct democracy.
... Biases influence behaviors beyond those found in more laboratory-based experiments (Gächter et al., 2009;Gigerenzer, 2002). The best evidence for biases in cyber attackers comes from prior examination of a small red team (simulation of cyber offensive actors) cyber experiment (Ferguson-Walter et al., 2017). ...
Attacker psychology is currently under-examined in cybersecurity research. A prior, large-scale study sought to understand attackers' behavior by testing both technological and psychological deception. Professional "red team" members participated over two days in various conditions. This data was examined for further evidence that cognitive biases, a potential disruption for attackers, may be present, and may be affecting the outcome. An applied, novel methodology for measuring confirmation bias and framing effects is presented using this realistic dataset. Both confirmation bias and the framing effect occurred in this interpretation. The framing effect appears to have reduced attacker interactions with systems in the network, which may benefit cyber defenders. These results provide additional, exploratory evidence that biases in the decision-making of cyber attackers could be used as part of a defensive cyber strategy. Limitations to the approach and directions for future study of attackers are discussed.
... Opinions may also be influenced if the rationale is framed in terms of the losses that the intervention is intending to prevent. Loss aversion 36 can explain why penalty frames are sometimes more effective than reward frames in motivating people 37 . This suggests that framing the consequences of not using an intervention in a negative way (i.e., as a loss) could improve people's perceptions of it. ...
Despite their increasing use, choice architecture interventions have faced criticism for being possibly manipulative and unethical. We empirically explore how an intervention’s acceptability differs by the type of intervention used, by the domain, and by the way in which its implementation and benefits are explained. We employ a 5 × 5 × 5 factorial design with three fully crossed predictor variables: domain, type of intervention, and explanation. We measure participants’ acceptance of the proposed intervention, perceived threat to autonomy and freedom of choice, and belief that the intervention will be successful. We hypothesized that acceptability of the intervention and perceived threat to autonomy will change as a function of the type of intervention used, the domain in which it is implemented, and the rationale for which its use is presented. We find that acceptability of the intervention, perceived threat to autonomy, and belief that the intervention will be successful differ by the type of intervention used and by the domain in which it is implemented. The rationale for the use of the intervention appears to change acceptability of the intervention depending on the type of intervention that is being used, and the domain in which it is implemented. Exploratory analyses were conducted to investigate differences between specific levels within factors, and interactions between factors. Given the variation in acceptability across the three factors, we believe that the discourse about the ethics of choice architecture should avoid generalizations and should instead be at the level of individual interventions in a specific situation. We conclude with a discussion about areas for future research.
Protocol registration
The stage 1 protocol for this Registered Report was accepted in principle on 14 October 2022. The protocol, as accepted by the journal, can be found at: https://doi.org/10.6084/m9.figshare.21758666 .
... Os arquitetos de escolha podem direcionar a atenção dos indivíduos através da apresentação das escolhas de um modo que destaque aspectos positivos ou negativos da mesma decisão, levando a mudanças em sua atratividade relativa [Gächter et al 2009]. ...
Com o avanço da tecnologia e sua influência no cotidiano da sociedade, é importante entender quais os potenciais efeitos comportamentais decorrentes do design de um sistema de informação. Uma vez que não existe uma forma neutra de apresentar as informações, todas as decisões relacionadas ao design da interface de um sistema influenciam o comportamento dos usuários, o que pode levar a consequências inesperadas. A arquitetura de escolha consiste em intervenções, conhecidas como nudges, com o objetivo de influenciar o comportamento das pessoas. Dada a importância de os designers de sistemas de informação organizarem o contexto no qual as pessoas tomam decisões, este capítulo tem como objetivo apresentar os principais conceitos relacionados a nudges, incluindo exemplos e oportunidades de aplicação, especialmente no contexto do meio ambiente.
... Os arquitetos de escolha podem direcionar a atenção dos indivíduos através da apresentação das escolhas de um modo que destaque aspectos positivos ou negativos da mesma decisão, levando a mudanças em sua atratividade relativa [Gächter et al 2009]. ...
... We should note that a "positive" reputation system merits attention: A Worker with a good reputation could gain additional advantages and benefits in the future. However, experiments conducted in the framework of the Theory of Loss Aversion give reason to assume that penalties may in some instances turn out to be more effective than rewards in motivating people to behave in a certain way [2]. ...
Decentralized public platforms are becoming increasingly popular due to a growing number of applications for various areas ofbusiness, finance, and social life. Authorless nodes can easily join such networks without any confirmation, making a transparent system of rewards and punishments crucial for the self-sustainability of public platforms. To achieve this, a system for incentivizing and punishing Workers’ behavior should be tightly harmonized with the corresponding consensus protocol, taking into account all of its features, and facilitating a favorable and supportive environment with equal rights for all participants. The main purpose of re-wards is to incentivize Workers to follow the protocol properly, and to penalize them for any type of misbehavior. The issues of block rewarding and punishing in decentralized networks have been well studied, but the DAG referential structure of the distributed ledger forces us to design methods that are more relevant. Since referential structures cannot be reliably validated due to the fact that they are built on the basis of the instantaneous visibility of blocks by a certain node, we propose to set rewards for blocksin the DAG network based on the degree of confidence of topological structures. In doing so, all honest nodes make common decisions based only on information recorded into the ledger, without overloading the network with additional interactions, since such data are al-ways identical and available.The main goal of this work is to design a fair distribution of rewards among honest Workers and estab-lish values for penalties for faulty ones, to ensure the general economic equilibrium of the Waterfall platform. The proposedap-proach has a flexible and transparent architecture that allows for its use for a wide range of PoS-based consensus protocols. The core principles are that Workers' rewards depend on the importance of the conducted work for block producing and achieving consensusand their penalties must not be less than the potential profit from possible attacks. The incentivizing system can facilitate protection from various kinds of attacks, namely, so-called Nothing-at-stake, Rich-get-richer, Sybil, and Splitting attacks, and from some specif-ic threats related to a DAG structure.Keywords: Tokenomics;incentivizing; blockchain; directed acyclic graph; consensus protocolCopyright©Odessa Polytechnic National University, 2022. All rights reservedFor citation:Mazurok I., Leonchyk Y., Grybniak S., Nashyvan O., Masalskyi R.An incentive system for decentralized DAG-based platforms. Applied Aspects of Information Technology.2022; Vol.5No.3: 196–207. DOI:https://doi.org/10.15276/aait.05.2022.13INTRODUCTIONThis work deals with the incentivizationof nodes of the Waterfall platform to honestly perform their duties for achieving a sustainable, secure, and high-performing network, by driving behaviors of all participants with economic leverages. However, it can be considered as a standalone work thatpresents an incentive system that can be implemented, in part or in whole, to other Proof-of-Stake (PoS) [1] consensus protocols of decentralized networks. ©Mazurok I., Leonchyk Y., Grybniak S.,Nashyvan O., Masalskyi R., 2022The issues of creating a fair distribution of rewards among platform Workers and setting values of penalties are addressed in detail.The incentive mechanism is the backbone of any tokenomics system(tokenomics is a term that captures a token’s economics). Itshould facilitate nodes’ positive actions such as processing transactions,validating blocks,and finalizing the ledger.We should note that users can join or leave public networks at their own discretion. Obviously, ifrewards do not cover Workers’ expenditures or are distributed unfairly, honest participants have no incentive to participate in such a network. A good tokenomics practice includes buildingacommunityThis is an open access article under the CC BY license (http://creativecommons.org/licenses/by/3.0)
... Schindler & Pfattheicher, 2016) to avoid a loss than to make a gain. The basic principle of loss aversion can explain why penalties are sometimes more effective than rewards in motivating people (Gächter et al., 2009) and has been applied in behaviour change strategies. People's cultural background may influence the extent to which they are averse to losses (e.g., Wang et al., 2017). ...
A relatively new scientific discipline that finds its primary source in psychology, better known as behavioural economics, is attracting the attention of many authors. It is increasingly applied for the purpose of better understanding consumers, especially in decision making, including personal feelings and limitations in a realistic way. This paper aims to present a model of application of behavioural economics in the sectors of the creative industry. The creative industry has great potential in the role of regional development, accordingly the application of behavioural economy in its sectors can have a positive impact on the further development of the economy of the Republic of Croatia. The paper proposes a model for applying mental accounting to increase the number of visitors in the arts and culture sector to increase the attendance at events of projects funded by EU projects and which must be free.
... This effect was originally published as the well-know "Asian disease problem" (Tversky and Kahneman 1981) where participants were asked to choose between 2 alternative programs to combat a disease, the first being framed a "people will live" and the second one framed as "people will die". These results fit a general pattern that losses or penalties affect our behavior more than gains or discounts, which is evidence for irrational behavior since the options have equal mathematical expectations but preferences are not invariant (Tversky and Kahneman 1981, Plous 1993, Druckman 2001, Gächter et al. 2009). ...
Reinforcement learning is a fundamental cognitive process operating pervasively, from our birth to our death. The core idea is that past experience gives us the ability of learning to improve our future choices in order to maximize the occurrence of pleasant events (rewards) and to minimize the occurrence of unpleasant events (punishments). Within the reinforcement learning framework, one of the most fundamental and timely questions is whether or not the values are learned and represented on an absolute or relative (i.e., context-dependent) scale. The answer to this question is not only central at the fundamental and theoretical levels, but also necessary to understand and predict why and how human decision-making often deviates from normative models, leading to sub-optimal behaviors as observed in several psychiatric diseases, such as addiction. In an attempt to fill this gap, throughout the work carried out during this PhD, we developed existing models and paradigms to probe context-dependence in human reinforcement learning. Across two experiments, using probabilistic selection tasks, we showed that the choices of healthy volunteers displayed clear evidence for relative valuation, at the cost of making sub-optimal decisions when the options are extrapolated from their learning context, suggesting that economic values are rescaled as a function of the range of the available options. Moreover, results confirmed that this range-adaptation induces systematic extrapolation errors and is stronger when decreasing task difficulty. Behavioral analyses, model fitting and model simulations convergently led to the validation of a dynamically range-adapting model and showed that it is able to parsimoniously capture all the behavioral results. Our results clearly indicate that values are not encoded on an absolute scale in human reinforcement learning, and that this computational process has both positive and negative behavioral effects. In an attempt to explore the link to -an impairment of- this process in reward-related psychiatric diseases, we performed a meta-analysis based on the valence bias observable in several pathologies. Preliminary results suggest that healthy volunteers learn similarly from rewards and punishments, whereas it is not the case for pathologies such as Parkinson’s disease or substance-related disorders. In a large-scale experiment, coupled with a transnographic approach used in computational psychiatry, we found that the parameters of our model could not be directly linked with different dimensions of psychiatric symptoms, including obsessive compulsive disorders, social anxiety, and addiction. Further work will improve our modeling tools to better account for behavioral variance. In the long term, these analyses will potentially help to develop new tools to characterize phenotypes of several pathologies and behavioral disorders, as well as improve patients’ treatment at the individual level.
... One example of a cognitive bias discovered by Kahneman and Tversky is the "framing effect," that is the phenomena how different phrasing affects individuals' decision. For example, participants for a conference were found to register earlier when there was a "penalty" of $50 for late registration than when there was a discount of $50 for early registration (Gächter et al., 2009). ...
Research on human resources (HR) indicates that many biases (e.g., halo effect, confirmation bias, stereotyping bias) affect decisions taken by HR employees. However, it remains unclear whether HR employees are aware of their susceptibility to bias. To improve understanding, this study examines the "bias blind spot" phenomenon, the tendency of individuals to believe they are less likely to be biased than their peers. This quantitative survey among 234 HR employees in Switzerland measured the bias blind spot on seven interview biases in recruitment decision-making. The study shows that participants rated the average HR colleague as more susceptible to bias than themselves. Furthermore, male HR employees partly showed a greater bias blind spot than female HR employees. These findings contribute to behavioral research in HR and offer practical insights.
... These studies have established that the reduction in welfare that people sustain when suffering a loss is greater than the increase in welfare they enjoy when obtaining a corresponding gain, a phenomenon dubbed "loss aversion" (Camerer, 2000;Kahneman & Tversky, 1979;Levin et al., 1998;Tversky & Kahneman, 1981, 1991. Both lab experiments and observations from the field have provided ample evidence for the greater effect of losses than gains (Gächter et al., 2009;Grolleau et al., 2016;Imas et al., 2017;Meyerowitz & Chaiken, 1987;Neale & Bazerman, 1985;Schurr & Ritov, 2020). 1 Furthermore, whether a given change in welfare is perceived as a loss or a gain depends on a prior reference point. The "framing effect" relates to the finding that describing a given change either as a loss or as a gain, compared to the reference point, leads to different reactions. ...
This article uncovers the role of framing in the determination of negligence. Negligence disputes fall into two categories: cases in which injurers inflicted harm while seeking to avoid a loss to themselves (loss frame) and those in which they were seeking to obtain a personal gain (gain frame). We develop a theoretical framework whereby the frame of the injurer's behavior shapes negligence determinations in two ways. First, people are less likely to find an injurer negligent in a loss than in a gain frame. This is because, due to loss aversion, they find behavior more reasonable if done to avoid a loss than to obtain a gain. Second, people accord greater weight to the efficiency of the injurer's behavior in a loss frame than in a gain frame. This is because a comparison between the victim's harm and the injurer's benefit is more salient when both parties face a loss (loss frame). A series of experiments supported both hypotheses as well as the underlying mechanism. We discuss the implications of our findings and suggest that they may relate to the seemingly inconsistent case law on the role of efficiency considerations in negligence cases.
... In reality, however, this assumption is often wrong. As evidenced by the results of research by behavioral economists, the way the decision-making problem is presented can have a key impact on the choices made in different areas of life [15,[115][116][117][118][119][120]. ...
The aim of the study is to fill the research gap in relation to one of the behavioral factors that have a potential impact on retirement decisions—the framing effect. A research question addressed in the study is whether the way in which the decision-making problem is formulated (the framing effect) influences decisions on the planned retirement age. To answer this question, an original research questionnaire was developed. It included a description of a hypothetical pension system and experimental vignette questions. The research was conducted on the basis of answers given by 1079 randomly selected respondents who were participants of the pension system in Poland before retirement. In the analysis of the results, non-parametric tests and multiple logistic regression were used to compare response distributions. As a result of the conducted research, it was proven that the framing effect significantly affects the extension of the planned retirement age. At the same time, it was found that loss framing affects pension decisions to a greater extent than gain framing. It has also been noted that women are more susceptible than men to the framing of pension decisions. An application conclusion resulting from the conducted research is indicated as the possibility of the intentional use of the framing effect by decision-makers in order to increase the effective retirement age.
... There is more of real-world evidence in behavioral studies within economics (e.g., Gächter et al., 2009;Ganzach & Karsahi, 1995;Hallsworth et al., 2017;Hong et al., 2015;Meier, 2005; This document is copyrighted by the American Psychological Association or one of its allied publishers. ...
Framing effects influence the measurement of knowledge, preference, and opinions, and they have implications for understanding mental representation and cognitive processes. Much of the evidence for framing effects, however, comes from controlled laboratory experiments rather than naturally occurring real-world behavior. We demonstrate how a crowd-sourced opinion website provides naturally occurring data to test for preference reversals and framing effects in subjective preferences. The data take the form of people’s top-n rankings of lists of items in response to specific questions, and we consider related pairs of lists for which the same people provide rankings. We compare the list “best actors in film history” with “best actors working today” and the list “best National Basketball Association (NBA) players of all time” with “best white NBA players of all time.” These lists have a conjunctive relationship, since the second list asks the same question as the first, but about a restricted set of items. We also compare the list “best U.S. presidents of all time” with “worst U.S. presidents.” These lists ask the same question but use “best” versus “worst” contexts. For all three comparisons, we find many cases in which the same person reverses their preferences for pairs of items between lists, and for which the same set of people systematically change their rate of ordering pairs of items. Our results provide real-world evidence for the presence of preference reversals and framing effects in subjective preferences. They also provide an example of the strengths and limitations of studying choice and preference using naturally occurring data.
... This basic principle reflects the association of loss aversion with brain structures driving the avoidance of potential threats via the engagement of aversive affective reactions, such as the amygdala and insula [65,66]. Most importantly, it provides a framework explaining why people are generally more motivated by penalty frames [85], which are indeed more often applied, compared with reward frames, in behaviour change strategies [86]. The present evidence suggests the effectiveness of loss aversion in modulating behavioural dispositions in complex, real-world, decisional conflicts between oppositely directed motivations concerning personal vs. collective health. ...
The COVID-19 pandemic and the measures to counteract it have highlighted the role of individual differences in evaluating and reacting to emergencies, and the challenges inherent in promoting precautionary behaviours. We aimed to explore the psychological and cognitive factors modulating behaviour and intentions during the national lockdown in Italy. We administered an online questionnaire (N = 244) that included tests for assessing personality traits (Temperament and Character Inventory; Locus of Control of Behaviour) and moral judgment (Moral Foundations Questionnaire), alongside behavioural economics tasks addressing different facets of risk attitude (loss aversion, risk aversion and delay discounting). We then assessed the extent to which individual variations in these dimensions modulated participants’ compliance with the lockdown norms. When assessing their joint contribution via multiple regressions, lockdown adherence was mostly predicted by internal locus of control, psycho-economic dimensions suggestive of long-sighted and loss-averse attitudes, as well as personality traits related to cautionary behaviour, such as harm avoidance, and the authority moral concern. These findings show that a multi-domain assessment of the factors underlying personal intentions, and thus driving compliance with government measures, can help predict individuals’ actions during health emergencies. This evidence points to factors that should be considered when developing interventions and communication strategies to promote precautionary behaviours.
... The survey experiment on communicating data uncertainty conducted here is the first of its kind in the human rights literature. It was useful to begin by conducting an initial study that (Gächter, Orzen, Renner, & Starmer, 2009), and that professionals are less swayed by motivated reasoning (Kahan et al., 2016). Going forward, it will be ideal to conduct this study with professionals in addition to laypersons, although recruiting a sufficient sample size with internal validity could be challenging. ...
Data and statistics about crime and human rights violations are incomplete and biased, yet numbers are in high demand. Advocates and policymakers often tally up available, yet partial data and present them as hard numbers to bring attention to abuses and to influence aid and accountability. As calls for transparency about data limitations increase, I ask two related questions: 1) How do human rights advocates think about the value of quantification and its associated uncertainty when using it to inform and influence audiences? 2) With respect to quantitative evidence about violence, crime or abuse, how do different presentations of data uncertainty affect decision outcomes? Using mixed methods – qualitative and experimental – this research teases out the political, behavioral and methodological challenges that advocates face as they collect, communicate, and deploy violence statistics in global and local human rights advocacy contexts. Semi-structured interviews with twenty-eight frontline human rights advocates (focused on global, U.S., or Colombian issues) reveal that data uncertainty is an unavoidable reality in human rights work, and advocates are keenly aware of this. Advocates mostly share consistent and as-of-yet unrecognized ideas and practices about what could be called “good enough numbers” for advocacy. Central to these practices are pragmatic, yet principled tradeoffs that pull advocates away from strictly rigorous treatment of data and uncertainty. Transparency is a key issue that advocates somewhat reluctantly reduce in pragmatic considerations of benefits and risks. The survey experiment employed three vignettes and four uncertainty messages, designed on the basis of science communication theory and human rights communication practices, to explore the impact of “being transparent” about data limitations. Responses from 970 college graduates confirm that 1) numbers have strong anchoring effects, but also show that 2) simple caveats about uncertainty do little to de-anchor decision-making. The research also finds novel evidence that 3) only one message type – called here “expert interception” – effectively drives people to account for uncertainty in their decisions (replicating earlier findings about communicating uncertainty in weather forecasting (Joslyn & LeClerc, 2013)). Finally, 4) while different studies suggest perceptions of trustworthiness of information providers may increase, or decrease, with different levels of uncertainty information, this study finds minimal fluctuation in source trust across any of the tested uncertainty messages. Information providers face a clear choice in allowing numbers to speak for themselves or proactively mitigating bias through language – a choice that is inherently political. It appears that uncertainty is most effectively conveyed when communicators intercept the power of numbers to project “mechanical objectivity” with their expert knowledge about the data generation process and data limitations. A core theoretical contribution of this dissertation is the elucidation of a “rigor-pragmatism continuum” – a novel framework informed by the research findings. The continuum challenges the good-bad dichotomy that is common in critiques of human rights numbers and offers an alternative to support more nuanced analysis about how human rights advocates wrestle with using uncertain numbers. As a whole, this dissertation has wide-reaching implications for human rights and science communication scholarship and practice.
... Few studies have further proved that participants are also willing to behave dishonestly to avoid a loss than to make a gain [47]. The loss aversion experiments explain why penalties are more effective than incentives in motivating people to behave in a certain way [48]. We use the same principles to motivate validators to participate honestly instead of being malicious validators in the network. ...
Blockchains have witnessed widespread adoption in the past decade in various fields. The growing demand makes their scalability and sustainability challenges more evident than ever. As a result, more and more blockchains have begun to adopt proof-of-stake (PoS) consensus protocols to address those challenges. One of the fundamental characteristics of any blockchain technology is its crypto-economics and incentives. Lately, each PoS blockchain has designed a unique reward mechanism, yet, many of them are prone to free-rider and nothing-at-stake problems. To better understand the ad-hoc design of reward mechanisms, in this paper, we develop a reward mechanism framework that could apply to many PoS blockchains. We formulate the block validation game wherein the rewards are distributed for validating the blocks correctly. Using evolutionary game theory, we analyze how the participants' behaviour could potentially evolve with the reward mechanism. Also, penalties are found to play a central role in maintaining the integrity of blockchains.
... Os arquitetos de escolha podem direcionar a atenção dos indivíduos através da apresentação das escolhas de um modo que destaque aspectos positivos ou negativos da mesma decisão, levando a mudanças em sua atratividade relativa [17]. ...
... These results contribute to the literature on the endowment effect in the field (see, for example, Anagol et al., Forthcoming) and in particular, on the extent to which experience can attenuate it (List, 2003(List, , 2004Feng and Seasholes, 2005;Dhar and Zhu, 2006;Gächter et al., 2009;Greenwood and Nagel, 2009;Seru et al., 2010;Engelmann and Hollard, 2010;List, 2011;Anagol et al., Forthcoming). Engelmann and Hollard (2010) designed a laboratory experiment to study how market experience helps overcome the lack of trading and make the interesting distinction between choice and trade uncertainty. ...
... Micro transactions are in-game purchased methods that will unlock special features or provide special capabilities, characters, or content for users. With this new methods model, it shifted the behavior of gamers itself [12,45,47,54]. Video game monetization is an increasingly fast, insensitive, and dangerous from the developers and publishers who undervalue the consumer's well-being. ...
... Verliesaversie Vanuit de gedragswetenschappen weten we dat veel mensen ook verliesavers zijn (zie bijvoorbeeld Kahneman & Tversky, 1979), wat betekent dat het negatieve gevoel bij een verlies van een bepaald bedrag groter is dan het positieve gevoel bij de winst van een even groot bedrag. Zo geldt ook dat boetes een sterkere afkeer geven dan dat beloningen van dezelfde grootte aan positieve stimulans geven, en dus werken boodschappen met potentiele boetes soms beter dan dat beloningen werken (Gächter, Orzen, Renner & Starmer, 2009). Mensen zouden een boete graag willen voorkomen, dus bijvoorbeeld een boete voor mensen die nog (te veel) grijze energie verbruiken zou kunnen helpen om mensen sneller over te laten stappen op groene energie. ...
Behavioral-economic pitfalls in the energy transition The energy transition requires large investments. The public debate in the Netherlands focuses on the associated costs, and the government uses traditional instruments such as subsidies. From the perspective of behavioral economics this approach has a few drawbacks. The goal of this article is to discuss behavioral-economic pitfalls which are important for two topics regarding the energy transition. First, households need to take measures themselves with regard to the switch to alternative energy sources. Several behavior-economic pitfalls influence households’ decisions. The most important ones are risk aversion, loss aversion, choice overload and motivation crowding out. A number of measures are discussed which the government might employ to facilitate this behavioral change by households. Second, large investments will be needed in the electricity network due to the energy transition. These costs might be mitigated by a behavioral change in energy use of households and firms: either by using less energy or by using energy at other times of the day. This might be achieved by introducing dynamic electricity tariffs. However, behavioral-economic pitfalls will affect the interest in such tariffs, most notably motivation crowding out and moral licensing. Their effects will be lessened if financial incentives are not emphasized.
... For example, subjects rated beef described as 75% lean (positive frame) as almost 2 points tastier on a 5-point scale than the same beef labeled as 25% fat (negative frame) [22]. However, the reverse effect was found with doctoral candidates as respondents: increases in registration fees after a certain date framed negatively as a "late penalty" led to significantly more early registrations (93%) than fees framed positively ("early discount"; 67%) [9]. These contradictory effects underscore the importance of studying the framing effect, as well as understanding its boundary conditions. ...
Two studies tested the hypothesis that power affects an individual’s likelihood to be influenced by positively vs. negatively framed comparative messages. Experiment 1 showed that individuals with a higher personal sense of power are more persuaded by positively framed messages than negatively framed messages. Experiment 2 showed that this effect is partly attributable to higher power individuals being more suspicious of the negatively framed communicator’s motivation. Message frame did not have a significant influence on individuals with lower levels of power. These results have important implications for tailoring comparative messages aimed at persuasion toward targets with different levels of power.
... Prospect theory proposes that humans are more sensitive to losses than to reward (Kahneman & Tversky, 1979; but see Ert & Erev, 2013;Lejarraga, Schulte-Mecklenbeck, Pachur, & Hertwig, 2019;Yechiam, 2019;Yechiam & Hochman, 2013a, 2013b. Loss aversion explains why people are more willing to take risks to avoid a loss than to procure a gain (Schindler & Pfattheicher, 2017), and how penalties are more effective than reward in motivating people (Gächter, Orzen, Renner, & Starmer, 2009). However, Wentura, Müller, and Rothermund (2014) showed that there were no differences in the magnitude of attentional capture by reward-associated and loss-associated distractors (see also Grégoire, Britton, & Anderson, 2020). ...
Motivated attention can be driven by the desire to maximize gains or escape punishment. In the Stroop task, when rewards can be obtained by responding quickly to certain colors, corresponding color words are prioritized and produce enhanced interference, suggesting transfer of an attentional bias from color hues to color words. In the present study, we replicated this transfer effect using reward and conducted a parallel experiment exchanging the prospect of reward (appetitive motivation) with the opportunity to avert punishment (aversive motivation). Participants were required to identify the color (hue) of color words and received electric shocks for responses to particular hues that were slow or incorrect. Shock-related words similarly impaired color-ink naming performance. In contrast to prior studies with reward, however, responding to hues associated with shock was also impaired, with threat producing an increase in error rate that ironically resulted in more frequent shocks. Our results suggest that aversive and appetitive motivation affect attention to task-relevant information differently, although each produces a common bias in automatic stimulus processing presumably driven by valence.
To make the process of identifying and recognizing needs more transparent and to postulate a theory of need-based justice, we investigated various frames in which decision problems were embedded. External frames in a strict sense, with gain and loss frames in risky choices and need as an additional factor, showed significant differences in choice frequencies. External frames in a loose sense, such as time constraints, different diseases in an Asian Disease paradigm, and the identifiability of a needy person, showed framing effects and mixed results with respect to need. Internal frames measured by personality inventories also showed mixed results. The dual-stage dual-process model includes a normative part and a descriptive part, which both account for framing effects. In one version of the model, the normative part includes the expected utility model modified by the Stone–Geary function.
Prioritizing who to provide healthcare services seems unavoidable under conditions of scarce resources. Triage is one of the best-known approaches for establishing the criteria for healthcare allocation. Here we utilize justice distribution principles, i.e., equity, equality, and need as prioritization criteria and investigate the effects of attribute framing on healthcare allocation decisions. In particular, we discuss psychological theory and previous research on framing effects in terms of delivering and withholding services. We also present recent empirical findings demonstrating that framing influences people’s preferences for justice distribution principles in healthcare.
This article aims to unravel the dynamics of social influence by examining the processes that occur when one person is the target of another’s influence. We hypothesized that these processes are part of a feedback loop system in an individual. This loop involves the situation (input), a goal state (reference), a comparator, a selection mechanism, a feedback predictor, and an action (output). Each element can become the target of social influence, and different types of social influence can be classified and explained by how these elements are targeted. For instance, attempting to persuade another person with strong arguments targets the goal state of the affected individual, while obedience targets the selection mechanism, and violence targets the action. In summary, this article aims to categorize, order, and explain phenomena in social influence research using a feedback loop framework focusing on the influenced individual.
This article aims to unravel the dynamics of social influence by examining the processes that occur when one person is the target of another’s influence. We hypothesized that these processes are part of a feedback loop system in an individual. This loop involves the situation (input), a goal state (reference), a comparator, a selection mechanism, a feedback predictor, and an action (output). Each element can become the target of social influence, and different types of social influence can be classified and explained by how these elements are targeted. For instance, attempting to persuade another person with strong arguments targets the goal state of the affected individual, while obedience targets the selection mechanism, and violence targets the action. In summary, this article aims to categorize, order, and explain phenomena in social influence research using a feedback loop framework focusing on the influenced individual.
According to conventional finance theories, individuals are presumed to make rational investment decisions by thoroughly evaluating risk and return aspects in order to optimize their benefits while minimizing potential losses. Behavioral finance presents a critique of the conventional financial theory by proposing that individual investing decisions are influenced by various biases. This set of biases encompasses many heuristic biases, such as anchoring, representativeness, and the gambler's fallacy, among others. Additionally, it includes regret aversion, framing, and the disposition effect, as expounded upon within the framework of prospect theory. The primary objective of this research article is to examine the influence of biases on the process of investment decision making and explore potential strategies that individual investors might employ to enhance their ability to make rational judgments. This study examines the constraints imposed on human decision making by practical considerations, and ultimately asserts that individual investors must diligently gather and analyze data, while also taking into account external circumstances, prior to engaging in investing activities.
Although numerous studies have confirmed the existence and possible limitations of the equivalent framing effect in performance information evaluation, few studies have examined the conditions under which this framing effect works or does not work. This paper explores the equivalent framing effect of citizen satisfaction in the case of poor government performance by using two investigation experiments, and examines the boundary conditions of this effect in terms of performance information sources and trust in government. The results show that citizen satisfaction is higher when performance information is framed positively, rather than negatively. The findings demonstrate that the equivalent framing effect of citizen satisfaction is moderated by performance information sources and trust in government. This result indicates that equivalent framing effect has a certain fragility, showing heterogeneity with different sources of performance information and different levels of public trust in the government.
Points for practitioners
Truthfully reporting poor performance is the basic requirement for local governments. This study reminds government staff that, on the one hand, low performance is not a scourge, and small changes in poor performance reports may significantly change citizen satisfaction. On the other hand, it is not a panacea to improve citizen satisfaction simply by changing the presentation of performance information. The government should make more efforts to improve the public's confidence in performance information and the government.
SPANISH: Una de las justificaciones más comunes sobre la pena es que la
misma sirve para prevenir delitos y lo haría desde su misma fase
de enunciación que consistiría en la comunicación de una
amenaza legal. Esta asunción está tan interiorizada en la
sociedad y en el legislador que una forma habitual de justificar
la criminalización de nuevas conductas y aumentar las penas es
apelar a la necesidad de aumentar los costes del delito para que
los potenciales infractores se retraigan de cometer delitos, algo
que supuestamente sucedería si se modifica el Código Penal en
tal sentido. Sin embargo, se ha tendido a aceptar que la pena
cumpliría tal función sin preocuparse ni el legislador ni la
dogmática de atender a la multitud de estudios procedentes de
las ciencias sociales que ayudarían a determinar qué
mecanismos están detrás de la prevención que puede producir
la enunciación del castigo. En el presente trabajo se ha tenido,
por tanto, un doble objetivo de investigación: por un lado, poner
a prueba la hipótesis que se encuentra detrás de la estrategia
legislativa consistente en aumentar las penas y los ámbitos de
criminalización esperando que ello produzca en los potenciales
infractores una necesidad de retraerse de realizar determinadas
conductas; y, por otro, poner de manifiesto otra serie de factores
que pueden estar relacionados con la prevención producida por
la enunciación de la norma penal y que van más allá de la mera
intimidación, relacionados con la comunicación del modelo de
conducta social y la legitimidad sustantiva de las normas. La
consecución de ambos objetivos se ha llevado a cabo por dos
vías: por un lado, mediante una revisión bibliográfica de la
literatura sobre la teoría de la disuasión general y de otros
factores relacionados con el cumplimiento como son la
influencia social y la legitimidad sustantiva de la norma; por
otro, con la realización de seis estudios empíricos propios en los
que se han puesto a prueba las diferentes hipótesis de los
principales enfoques de cumplimiento normativo. Entre los
principales resultados se encuentran que las variables de la
disuasión no suelen formar parte de los elementos que los
XVIII
sujetos de las muestras toman en consideración para la decisión
de cumplir. Este hallazgo iría en la línea de lo establecido en la
literatura sobre la disuasión que viene a sostener que para que
la misma pueda desplegar sus efectos deben de darse toda una
serie de requisitos que, normalmente, no se cumplen. En
cambio, sí tienen mucha más importancia para dicho
cumplimiento variables relacionadas con la transmisión del
modelo de conducta normativo, la desaprobación moral social,
o el juicio moral o sistema de valores del individuo. En este
mismo sentido, una ausencia de cualidades de la norma como la
legitimidad percibida de la misma puede producir efectos
perversos que derivarían en el incumplimiento y la erosión de
la legitimidad de la norma y la autoridad, confirmando la
necesidad de que la norma penal revista de legitimidad para que
la misma genere cumplimiento voluntario. Finalmente, se
establecen algunas conclusiones para la criminología, el
Derecho penal y la política criminal derivadas de la
investigación y que contribuirían a mejorar, por un lado, el
debate sobre los efectos de la sanción penal y, por otro, la parte
de la política criminal que corresponde a la regulación y sanción
de determinadas conductas socialmente disvaliosas // ENGLISH: One of the most common rationales for punishment is that it is
useful to prevent crime, and it would do so from its very phase
of enunciation, which would consist of the communication of a
legal threat. This assumption is so internalized in society and in
the legislator that a common way of justifying the
criminalization of new behaviors and increasing penalties is to
appeal to the need to increase the costs of crime so that potential
offenders are deterred from committing crimes, something that
would supposedly happen if the Penal Code were modified in
this sense. However, there has been a tendency to accept that
punishment would fulfil such a function without the legislator
or the legal academic community considering the multitude of
studies from the social sciences that would help to determine
what mechanisms are behind the prevention that can be
produced by the enunciation of punishment. The present thesis
has therefore had a double research objective: on the one hand,
to test the hypothesis behind the legislative strategy of
increasing penalties and areas of criminalization in the hope that
this will produce in potential offenders a need to refrain from
carrying out certain behaviors; and, on the other, to highlight
another series of factors that may be related to the prevention
produced by the enunciation of the criminal norm and which go
beyond mere intimidation, related to the communication of the
model of social behavior and the substantive legitimacy of the
norms. Both objectives have been pursued in two ways: on the
one hand, through a literature review of the literature on general
deterrence theory and other factors related to compliance such
as social influence and substantive legitimacy of the norm; on
the other hand, by conducting six empirical studies of our own
in which the different hypotheses of the main compliance
approaches have been tested. Among the main results are that
deterrence variables do not tend to be part of the elements that
subjects in the samples take into consideration in their decision
to comply. This finding would be in line with what is established
in the literature on deterrence, which argues that for deterrence
XX
to have an effect, a series of requirements must be met that are
not normally fulfilled. In contrast, variables related to the
communication of the normative model of behavior, social
moral disapproval, or the moral judgement or value system of
the individual are much more important for such compliance. In
this same sense, an absence of qualities of the norm such as its
perceived legitimacy can produce perverse effects that would
lead to non-compliance and the erosion of the legitimacy of the
norm and authority, confirming the need for the criminal norm
to have legitimacy for it to generate voluntary compliance.
Finally, some conclusions are drawn for criminology, criminal
law and crime policy arising from the research, which would
contribute to improving, on the one hand, the debate on the
effects of criminal punishment and, on the other, the part of
crime policy that relates to the regulation and punishment of
certain socially disvaluable conducts
This article aims to describe social influence by elucidating the cognitive, affective, and motivational processes that occur when an individual experiences an attempt at being influenced. We hypothesized that these processes are part of a feedback loop system in an individual. This loop involves the situation (input), a goal state (reference), a comparator, a selection mechanism, a feedback predictor, and an action (output). Each element can become the target of social influence, and different types of social influence can be classified and explained by how these elements are targeted. For instance, attempting to persuade another person with strong arguments targets the goal state of the affected individual, while coercion targets the selection mechanism, and violence targets the action. In summary, this article aims to categorize, order, and explain phenomena in social influence research using a feedback loop framework focusing on the influenced individual.
The use of laboratory experiments to study issues in agricultural policy has grown in prominence within the fields of agricultural and environmental economics. Such experiments are often conducted with university students and framed in an abstract manner. This raises questions about whether the findings of these experiments provide reliable insights on the behaviour of actual agents in real settings. We contribute to this methodological debate by analysing the impacts of sample population and framing on behaviour in the experiment and on two policy effects: the direction and the magnitude of the policy impact. We also examine the channels through which differences in results may occur. For this, we test if behaviour is correlated with a set of covariates collected from our samples, including socio‐demographics, social and risk preferences. Our main finding is that the type of subject significantly affects the magnitude of the policy impact. The two populations differ substantially in the representation of key characteristics and preferences, which in consequence affects behaviour in the experiment. We find no significant impact of framing on behaviour.
Within contests, adjudication errors imply at the same time the exclusion of a meritorious candidate and the inclusion of a non-meritorious one. We study theoretically how adjudication errors affect bids in all-pay auctions, by disentangling the respective effects of exclusion and inclusion errors, and showing how they interact with the framing of incentives (prize or penalty) under different assumptions on preferences. We test our theoretical predictions with an experiment where we manipulate the presence of exclusion errors, inclusion errors, and the framing of incentives. The experimental evidence indicates that errors of either exclusion or inclusion significantly decrease bids in all-pay auctions relative to a setting without errors, interacting negatively, with no significant difference in the size of their effects. Bid levels are significantly higher in a penalty framing relative to a prize framing, both in the absence of errors and in the presence of adjudication errors.
Human perception, memory and decision-making are impacted by tens of cognitive biases and heuristics that influence our actions and decisions. Despite the pervasiveness of such biases, they are generally not leveraged by today's Artificial Intelligence (AI) systems that model human behavior and interact with humans. In this theoretical paper, we claim that the future of human-machine collaboration will entail the development of AI systems that model, understand and possibly replicate human cognitive biases. We propose the need for a research agenda on the interplay between human cognitive biases and Artificial Intelligence. We categorize existing cognitive biases from the perspective of AI systems, identify three broad areas of interest and outline research directions for the design of AI systems that have a better understanding of our own biases.
Behavioral Finance has already become the new theoretical financial paradigm. Based on other disciplines, such as psychology, sociology, and philosophy, it comes to fill in the gaps of the Efficient Market theory by studying and interpreting the behavior of people who are involved in the stock market, and, thus, discover the reasons for wrong investment choices and financial anomalies resulting from such activities.The research carried out on a sample of students attending additional degree upgrading courses demonstrates that the subjects, who are also going to be prospective investors and stock market professionals, are vulnerable to cognitive and emotional errors.KeywordsCognitive errorsEmotional errorsBehavioral financeEfficient market theory
We collect data on 75 million GBP of tennis bets over a 6 year period to analyze whether participants in high‐stakes environments recognize simple framing differences. The structure of this market means that we can place the same bet at the same time in two different ways. These two isomorphic bets are framed differently, and often priced differently. We find that bettors make frequent mistakes, choosing the worse of the two bets in 35% of cases. However, bettors who choose the inferior price earn higher returns from their bets, suggesting that their effort has been focused on fundamental information acquisition rather than bet execution. The net result is that market selection may, if anything, slightly favor those who are unable, or unwilling, to recognize framing differences.
Rational choice assumes that when people make decisions, they do so to maximize their net utility. To achieve this goal, people use all the information available and consider all the choices available to choose an optimal choice. Bounded rationality shows that rational choice is limited, and therefore people make satisfactory and sufficient choices rather than fully optimized choices. This chapter studies what happens when AI agents make decisions rather than human agents. While AI agents still do not make fully rational choices, they make choices that are more rational than those made by human agents.
Objetivos do estudo: A presente pesquisa explora aspectos específicos do Programa Bolsa Família (PBF), a saber, o acompanhamento das suas condicionalidades, sob perspectiva da economia comportamental. Metodologia/abordagem: Foi feita uma revisão da literatura acerca do Programa Bolsa Família e um panorama geral sobre Economia Comportamental, com o intuito de detalhar os possíveis insights que poderiam ser utilizados no aprimoramento PBF. Principais resultados: Foi proposta uma forma de intervenção no programa, baseada nos conceitos comportamentais, qual seja: uma simplificação na linguagem utilizada com o beneficiário do programa na carta de advertência que é enviada em caso de descumprimento de alguma condicionalidade. Foi também feita uma proposta de avaliação da intervenção no PBF. Contribuções práticas: Este estudo pretende contribuir para que o PBF possa fazer uso de mecanismos da economia comportamental para melhorar a comunicação com o beneficiário em situação de descumprimento de condicionalidades. Contribuições acadêmicas: Este estudo traz contribuições para a literatura de políticas públicas e economia comportamental.
As task situations across settings become more competitive and threatening, people face greater challenges in being creative amid these increasingly unfavorable conditions. We used the state-based attachment perspective and a gain/loss frame analysis to examine the temporary attachment state that leads to creative idea generation in a threatening task situation. Experimental data supported our hypothesis that full-time workers primed to have a temporary fearful (vs. secure) attachment state would generate more creative ideas related to a loss-framed task, but not in the context of a gain frame. We discuss potential mechanisms explaining the fearful attachment state's positive effect on creativity in a threatening task context.
This study examines individual behavior in two well-functioning marketplaces to investigate whether market experience eliminates
the endowment effect. Field evidence from both markets suggests that individual behavior converges to the neoclassical prediction
as market experience increases. In an experimental test of whether these observations are due to treatment (market experience)
or selection (e.g., static preferences), I find that market experience plays a significant role in eliminating the endowment
effect. I also find that these results are robust to institutional change and extend beyond the two marketplaces studied.
Overall, this study provides strong evidence that market experience eliminates an important market anomaly.
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.
The psychological principles that govern the perception of decision problems and the evaluation of probabilities and outcomes
produce predictable shifts of preference when the same problem is framed in different ways. Reversals of preference are demonstrated
in choices regarding monetary outcomes, both hypothetical and real, and in questions pertaining to the loss of human lives.
The effects of frames on preferences are compared to the effects of perspectives on perceptual appearance. The dependence
of preferences on the formulation of decision problems is a significant concern for the theory of rational choice.
Experimental economists are leaving the reservation. They are recruiting subjects in the field rather than in the classroom, using field goods rather than induced valuations, and using field context rather than abstract terminology in instructions. We argue that there is something methodologically fundamental behind this trend. Field experiments differ from laboratory experiments in many ways. Although it is tempting to view field experiments as simply less controlled variants of laboratory experiments, we argue that to do so would be to seriously mischaracterize them. What passes for "control" in laboratory experiments might in fact be precisely the opposite if it is artificial to the subject or context of the task. We propose six factors that can be used to determine the field context of an experiment: the nature of the subject pool, the nature of the information that the subjects bring to the task, the nature of the commodity, the nature of the task or trading rules applied, the nature of the stakes, and the environment that subjects operate in.
Corruption in the public sector erodes tax compliance and leads to higher tax evasion. Moreover, corrupt public officials abuse their public power to extort bribes from the private agents. In both types of interaction with the public sector, the private agents are bound to face uncertainty with respect to their disposable incomes. To analyse effects of this uncertainty, a stochastic dynamic growth model with the public sector is examined. It is shown that deterministic excessive red tape and corruption deteriorate the growth potential through income redistribution and public sector inefficiencies. Most importantly, it is demonstrated that the increase in corruption via higher uncertainty exerts adverse effects on capital accumulation, thus leading to lower growth rates.
In this experimental study, involving subjects from Abu-Dis (West Bank), Chengdu (China), Helsinki (Finland), and Jerusalem (Israel), we test for a presentation bias in a two-person cooperation game. In the positive frame of the game, a transfer creates a positive externality for the opposite player, and in the negative frame, a negative one. Subjects in Abu-Dis and Chengdu show a substantially higher cooperation level in the positive externality treatment. In Helsinki and Jerusalem, no framing effect is observed. These findings are also reflected in associated first-order beliefs. We argue that comparisons across subject-pools might lead to only partially meaningful and opposed conclusions if only one treatment condition is evaluated. We therefore suggest a complementary application and consideration of different presentations of identical decision problems within (cross-cultural) research on subject-pool differences.
Does Market Experience Eliminate Anomalies?
LIST, J. A. (2003): "Does Market Experience Eliminate Anomalies?" Quarterly Journal of
Economics, 118(1), 41-71.