Framing Effect Definition:
The framing effect is a cognitive bias which means that our decisions and judgement is influenced by how something is presented. Our brains react to the context in which a choice is encapsulated and not just the item itself. For example people are loss averse and so we tend to avoid risk when something is framed positively, but are more willing to take a risk when it is framed in a negative way.
In 1981 Daniel Kahneman and Amos Tversky used a hypothetical case of a deadly disease being contracted by 600 people to investigate how the framing of information influences decisions. Respondents were asked to choose between two treatments for the disease. Treatment A was expected to result in 400 deaths, whilst treatment B had a 33% probability of no one dying, but a 66% chance of everyone dying.
Impact of Framing on Answers
The options were then phrased with either a positive framing (i.e. the number of people who would live) or a negative framing (i.e. the number of people who would die). Almost three quarters (72%) of participants chose treatment A when phrased in a positive way (“save 200 lives), but less than a quarter (22%) selected it when framed in a negative fashion (“400 people will die”).
Free delivery and free product (e.g. buy one get one free or lower priced product is free) are common strategies that retailers use to reduce attention on the price of a brand.
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