Cognitive Bias

Question 1

Cognitive biases

Answer 1

Illogical, systematic errors in thinking that negatively affect decision making
- it is important to note that some cognitive biases are not dependent on a heuristic

Question 2

Traversky & Khaneman aim

Answer 2

to test the influence of positive and negative frames on decision making

Question 3

Traversky & Khaneman procedure

Answer 3

Participants: 309 self selected US undergraduates

• Participants asked to make a decision between one of two options in a hypothetical scenario where they were choosing how to respond to the outbreak of a virulent disease.
  
  • ‘Imagine that the U.S. is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed. Assume that the exact scientific estimate of the consequences of the programs is as follows’
• in condition 1, positive framing
  
  • If Program A is adopted, 200 people will be saved.
  • If program B is adopted, there is a 1/3 probability that 600 people will be saved, and a 2/3 probability that no people will be saved.
• condition 2: negative framing
  
  • If Program C is adopted 400 people will die.
  • If Program D is adopted there is a 1/3 probability that nobody will die, and a 2/3 probability that 600 people will die.
• all 4 conditions are effectively the same

Question 4

Traversky & Khaneman results

Answer 4

In condition 1, 72% of the participants chose Program A, whereas only 28% chose program B. In condition 2, 22% of the participants chose Program C and 78% chose Program D

Question 5

Traversky & Khaneman conclusion

Answer 5

Thus, the influence of framing on decision-making is clearly demonstrated. When the information was framed positively, most people took a certain outcome, while most people took a chance on the less certain option over a certain loss when framed negatively.

Question 6

Framing affect

Answer 6

Prospect theory (Kahneman and Tversky, 1979) describes the way pp choose between alternatives that involve risk, where the probabilities of outcomes are known. 
- theory states that pp evaluate these losses and gains using heuristics. One of those heuristics is the framing effect, in which people react to choices depending on how they are presented or "framed." People prefer certain outcomes when information is framed in positive language, but prefer less certain outcomes when the same information is framed in negative language. In simple terms, when we expect success we prefer a definite win rather than a possible win, but when things look bad we will gamble on an uncertain defeat rather than a definite loss.