Case file
Framing Effect
- Filed under
- Too Much Information
The charge
Equivalent information leads to different choices depending on how it is worded or packaged. Gains, losses, and reference points change the decision even when the facts do not.
How it operates
People react to descriptions relative to a frame, not just to underlying outcomes. Loss aversion and risk sensitivity make wording matter.
Logged incidents
- Incident 01
A retention initiative gets more support when framed as protecting 90 percent of revenue than when framed as losing 10 percent of revenue.
- Incident 02
Customers respond differently to the same price change when it is presented as a discount removed versus a surcharge added.
- Incident 03
A reorg plan gains approval when described as preserving most roles rather than eliminating the minority of roles affected.
What to watch for
Ask yourself: 'If these same facts were phrased as gains instead of losses, would I choose differently?'
Recommended action
Run an invariance test: rewrite the decision in gain and loss frames and see whether your choice changes. Expected-value tables help strip away wording effects.
Known associates
- AnchoringAn initial number, label, or piece of information pulls later estimates toward it, even when it is arbitrary…
- Conservatism BiasWe revise beliefs too slowly when new evidence arrives.
- Contrast EffectSomething looks better or worse depending on what it is compared with immediately before or beside it.
- Distinction BiasWhen options are compared side by side, we exaggerate small measurable differences that matter little in…
- Focusing effectWhen one salient detail is in focus, it pulls judgment toward itself and crowds out other relevant factors.
- Money IllusionWe think in nominal money terms and ignore inflation, purchasing power, or real value.
Source of record