Framing effect: how the way information is framed impacts our decisions

The framing effect is a cognitive bias where people decide on options based on whether they are presented in a positive or negative way. Do you prefer your yoghurt with 10% fat or 90% fat-free?

Knowing about the framing effect is vital. It is one of the most significant biases in decision making and particularly important in health care and financial decisions.

The framing effect happens when decision-makers choose opposite solutions for identical problems based on how the issues are presented to them.
For example:

• Time and money management: A study found that 93% of students registered early when presented with a penalty fee for late registration, vs 67% doing so when it was presented as a discount for early registration.
• Economics: More people will support an economic policy where the employment rate is highlighted (10% employment rate) than if the unemployment rate is emphasised (90% unemployment rate).