The relationship between risk-adverse and risk-seeking in the framing effect
Nina Lesani
Douglas College
300065965
Dr. Hajera Rostam
Psychology 1200-003
July 10 th, 2014

Relationship between risk-adverse and risk-seeking in the framing effect
The way information is presented can greatly impact one’s judgments and decisions on the received information. For instance, the presentation of a cancer treatment in terms of mortality or survival may significantly influence one’s decision whether or not to accept the treatment. It’s important, therefore, to understand the processes behind people’s susceptibility to information presentation and how this may influence their judgements and decisions.
The presentation of ideas in different manners influences the way the audience perceives the idea and this phenomenon is called “framing”, as introduced by Tversky and Kahneman (1981), who specifically studied its effects in the decision making preferences of people. The framing effect, such as the one found in the Asian disease problem, is often explained by using Tversky and Kahnman’s (1979) prospect theory. This theory is based on the idea that people value gains and losses differently, and, as such, will base their decisions on perceived gains rather than perceived avoided losses. Thus, if a person were given two equal choices, one expressed in terms of possible gains and the other in possible avoided losses, people would choose the former; even if both achieve the same end results. Tverky and Kahneman argue that the displeasure associated with the loss is perceived to be greater than the pleasure associated with the same amount of gain. Therefore, people respond differently, depending on whether the choices are framed in terms of gains or in terms of losses.
A growing body of research in decision making is strongly influenced by the prospect theory and the Asian