How the Framing of Choices Affects Decision Making
In This Chapter
Identifying the importance of framing
Considering cognitive illusions
Understanding how framing affects decisions
Seeing how frames can be defaults
Looking at frames as heuristics
Addressing market failure and framing
Framing is how options and opportunities are presented. According to conventional economics, how options and opportunities are presented shouldn’t affect people’s choices — people are expected to look beyond the frame, at what’s really important.
This chapter discusses how the framing of options impacts choices. I provide a variety of examples, including the impact of defaults on choices, the effect of relative positioning on choices, and the role of negative versus positive frames in motivating choice. I elaborate upon some public policy implications of framing, which is particularly important ...