How to manage the framing effect - Deepstash

How to manage the framing effect

  • Consider the current frame: Be aware of marketing language when you are shopping for a product.
  • Reverse the frame: Take the current frame and state it in the opposite way.
  • Reframe the options: There may be more than two alternatives. Would it result in a loss, a gain, or a neutral impact?
  • Think like an outsider: It can help you to be as impartial as possible. What if the decision did not personally impact you?
  • Take your time: Studies show that thinking fast increases your chance of falling prey to the framing effect.

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

The framing effect

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.

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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).

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RELATED IDEA

It's a cognitive bias that causes people to think or act in a certain manner because they believe that other people are doing the same.

For example, the bandwagon effect might cause someone to adopt a certain political ideology, simply because influential people in their social circle have adopted the same ideology.

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Don’t Believe Healthy Labels

Don’t let your guard down when you see items labeled with healthy-sounding terms and don’t assume there is a correlation between things without proof. Know what you are eating by paying close attention to the nutritional information and, just as importantly, the recommended serving size.

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The ABCDs of categorizing decisions
  • Big-bet decisions: infrequent and high-risk - from major acquisitions to game-changing capital investments;
  • Cross-cutting decisions: frequent and high-risk - think pricing, sales, and operations planning processes or new-product launches;
  • Delegated decisions: frequent and low-risk - routine elements of day-to-day management, typically in areas such as hiring, marketing, and purchasing;
  • Ad hoc decisions: infrequent, low-stakes.

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