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Study notes

Framing and Behavioural Choice (Behavioural Economics)

  • Levels: AS, A Level
  • Exam boards: AQA, Edexcel, OCR, IB

What is a frame?

A frame is the way choices are described and presented.

Small details matter

Framing a question or offering it a different way often generates a new response by changing the comparison set it is viewed in. Small details matter because when making important decisions, people may give greater weight than they should to information that has fairly limited, if any, relevance. In other words, they have adopted a narrow frame of reference.

Altering what information is provided, and it’s design can help people make better decisions

People who use narrow framing often draw heavily on automatic / default assumptions

One important method of framing is to focus on the gain / loss option for consumers from a decision.

Consider this example

  1. “If you get the flu vaccine, you will be less likely to get the flu”
  2. “If you do not get the flu vaccine, you are more likely to get the flu"

Both statements contain the same information but they have been framed differently. Studies suggest that framing a choice in a positive way is more likely to increase immunisation take-up rates.

Examples of Framing

  • Framing of privacy settings on social networks such as Facebook
  • Presumed consent for human organ donations to increase the supply of organs
  • Framing of referendum questions
  • Framing of interest paid on loans i.e. presenting as "total interest to pay" rather than "annual percentage rate of interest"

Asymmetric Framing

This involves including an obviously inferior 3rd choice or a hyper-expensive 3rd option rather than a simple expensive/cheap choice which can then guide consumers towards choosing more expensively-priced items. Consider for example the framing of wine prices on a menu or the framing of different options for a film / music streaming service on the internet.

REVISION VIDEOS: View our full playlist of revision videos on behavioural economics over on the Tutor2u Youtube Channel:

https://www.youtube.com/playli...

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