E.C.M. van Schie

Problem representation, frame preference and risky choice

Abstract Previous research has demonstrated that the way in which decision problems are formulated or ‘framed’, can have strong and predictable effects on peoples preference for alternatives with risky or certain outcomes. To predict peoples behavior in decisions in less restricted situations, we studied what frame people prefer and whether this preference is related to their preference for risky or certain options. In this article we present two experiments testing the hypothesis that preference for a frame in which the alternatives are described as losses (loss frame) will lead to risk seeking and preference for gain frames will lead to risk aversion. We tested this relation including standard problems in the domain of human lives and more everyday problems. Results provided weak support for the predicted relation, but in the domain of human lives only. In the second experiment we included two types of problem presentation. We did obtain a substantial effect of the initial problem presentation on option preference, moreover, this effect was obtained irrespective of the frame subjects preferred to describe the problem. Results indicate that the initial problem presentation has an overriding effect on option preference. Implications of these findings are discussed.