Have a look at the following classic decision problem:
1. Which of the following would you prefer,
A) a certain win of $250, versus
B) a 25% chance to win $1000, and 75% chance to win nothing?
2. How about
C) a certain loss of $750, versus
D) a 75% chance to lose $1000, and 25% chance to lose nothing?
Work by the psychologists Tversky and Kahneman shows that responses are different if choices are framed as a gain (1.) or loss (2.). The majority of people faced with the first type of decision will opt for the riskless alternative A), while for the second decision people are more likely to choose the risky D). Humans tend to be loss averse.
Consider the following question:
Which of the following looks more attractive to you, ground beef that’s labeled as 90% lean OR ground beef that’s labeled as 10% fat?
The product with a “lean” frame is generally rated as higher in (expected) quality or taste than the same product with a “fat” frame. Not surprisingly, research has shown the effect of framing to lessen once the product has been consumed (Levin & Gaeth, 1988). This means that an initial purchase may be influenced by framing much more than re-purchasing decisions. (We’re all familiar with the saying “Fool me once, …”!)
Finally, here’s another framing problem:
Do you think you’d be more likely to register for an event before the deadline if you were threatened with a $50 late payment penalty or rewarded with a $50 discount for being on time?
Gächter and colleagues (2009) played this trick on unsuspecting senior (faculty) and junior academics (Ph.D. students) about to participate in an economics conference by emailing them either penalty or discount framed versions of a registration reminder. There was no significant difference in early registration for senior academics who were given different frames, but their junior counterparts were much more likely to register before the deadline in the penalty frame (93%) than the discount frame (67%). Perhaps juniors are more averse to the penalty because they have tighter budgets, while seniors are more experienced decision makers?
What all of the above framing problems have in common is that they are worded in a way that either highlights the positive or negative aspects of the same decision. Levin and crew (1998) have referred to these different types of frames as risky choice (e.g. gain/loss), attribute (e.g. lean/fat) and goal framing (e.g. discount/penalty), respectively.
Goal framing is particularly interesting with respect to its effects on motivations, because it emphasizes either positive consequences if an act is performed or negative consequences if it is not performed.
Brand new research by Higgins and his collaborators (about to be published in the Journal of Economic Psychology) looks at a motivational phenomenon related to framing, more specifically low versus high expressed likelihood. The first of two experiments they conducted had people participate in what they believed to be a marketing study for a new dairy company. Participants had to try a good tasting (sugar & nutmeg) and a bad tasting (clove) yoghurt, which were alternately labeled as Yoghurt A or Yoghurt B. But before they tasted and rated the yoghurts, they were told that the study will have a second part, during which they would taste more concentrations within one of the flavor categories (A or B). Participants were in four different experimental conditions, each using a different frame to communicate the likelihood that they would later try different flavors: 80% - B, 20% - A, 80% - A, or 20% - B.
Results showed that regardless of whether the expressed likelihood was about good or bad yoghurt, a high expressed likelihood (80%) intensified responses compared to the low expressed likelihood (20%): The taste and price ratings for the bad flavor became even worse, while the ratings for the good flavor became even better. The researchers’ theory behind this holds that a high expressed likelihood of a relevant future event can make a present experience more real and engaging (which they investigated further in a second experiment).
What are the practical implications of these findings? Higgins et al.’s work on expressed likelihood implies a “different frames for different people“ approach. In terms of potential applications they write:
Imagine there is a target category of people who are known to be setting aside too little of their income for their retirement accounts […] You know that within this category of people there are those who believe that their current contribution is fine and those who recognize that it is a problem but believe it is not a big problem.
The authors then propose the following interventions to maximize the persuasive impact of information for those two audiences:
For those who believe that their current contribution is fine, this positive evaluation can be weakened by telling them the likelihood that they will succeed in having the money they need upon retirement is low. This low expressed likelihood will deintensify their present positive response to their savings behavior. For those who believe that their current contribution is a problem, this negative evaluation can be transformed from a small to a big problem by telling them the likelihood that they will fail to have the money they need upon retirement is high. This high expressed likelihood will intensify their present negative response to their savings behavior.
This is interesting, because our intuitive choice of frame might be the exact opposite: let’s motivate people who are complacent about their retirement savings by scaring them with a ‘high likelihood of failure’ frame. The expressed likelihood tool suggests otherwise.
Available from July 2014: The Behavioral Economics Guide 2014 on BehavioralEconomics.com (free download)
Gächter, S., Orzen, H., Renner, E., & Starmer, C. (2009). Are experimental economists prone to framing effects? A natural field experiment. Journal of Economic Behavior & Organization, 70, 443-446.
Higgins, E. T., Franks, B., Pavarini, D., Sehnert, S., & Manley, K. (In press). Expressed likelihood as motivator: Creating value through engaging what’s real. Journal of Economic Psychology.
Levin, I. P., Schneider, S. L., & Gaeth, G. J. (1998). All frames are not created equal: A typology and critical analysis of framing effects. Organizational Behavior and Human Decision Processes 76, 149-188.
Levin, I. P., & Gaeth, G. J. (1988). How consumers are affected by the framing of attribute information before and after consuming the product. Journal of Consumer Research, 15, 374-378.
Tversky, A., & Kahneman, D. (1981). The framing of decisions and the psychology of choice. Science, 211 (4481), 453-458.