Framing Effect - Deepstash

Framing Effect

Imagine that there is an outbreak of a deadly disease that will kill 600 people and you must choose between the two options -  

  • Option 1: Guarantees that 200 people will live.
  • Option 2: Provides a one-third probability that all 600 people will live, but it also comes with a 1/3 probability that no one will survive.

You may choose option 1 due to loss aversion. If you think through the choices, you can see that the probabilities of each are identical. This is called the framing effect.

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ssuman24

A learner who loves to share wisdom on personal growth, happiness, and success on Deepstash. Topics include motivation, habits, goals, and mindset. Believes that everyone can achieve their dreams with the right attitude and action.

The idea is part of this collection:

Behavioral Economics, Explained

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