Article

Theory and Decision

, Volume 71, Issue 2, pp 235-250

First online:

A note on negativity bias and framing response asymmetry

  • Doron SonsinoAffiliated withSchool of Business Administration, The College of Management Email author 

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Abstract

An “unprocessed risk” is a collection of simple lotteries with a reduction-rule that describes the actual-payoff to the decision-maker as a function of realized lottery outcomes. Experiments reveal that the willingness to pay for unprocessed risks is consistently biased toward the payoff-level in the unprocessed representation. The “anchoring-to-frame” bias in cases of positive framing is significantly weaker than in cases of negative framing suggesting that rational “negativity bias” may reflect in asymmetric violations of rationality.

Keywords

Bounded rationality Framing-invariance Loss-aversion