Framing effects as violations of extensionality
- 170 Downloads
Framing effects occur when different descriptions of the same decision problem give rise to divergent decisions. They can be seen as a violation of the decision-theoretic version of the principle of extensionality (PE). The PE in logic means that two logically equivalent sentences can be substituted salva veritate. We explore what this notion of extensionality becomes in decision contexts. Violations of extensionality may have rational grounds. Based on some ideas proposed by the psychologist Craig McKenzie and colleagues, we contend that framing effects are justified when the selection of one particular frame conveys choice relevant information. We first discuss this idea from a philosophical point of view, and proceed next to formalize it first in the context of the Bolker–Jeffrey decision theory. Finally, we extend the previous analysis to non-expected utility theories using the Biseparable Preference model introduced by Ghirardato and Marinacci (2001) and therefore show that the analysis is independent of the assumptions of Bayesian decision theory.
KeywordsFraming effects Extensionality Information processing Bolker–Jeffrey decision model Biseparable Preferences
Unable to display preview. Download preview PDF.
- Ahn, D. S., & Ergin, H. (2007). Framing contingencies. Unpublished Manuscript, University of California, Berkeley.Google Scholar
- Gilboa, I. (eds) (2004) Uncertainty in economic theory: Essays in Honor of David Schmeidler’s 65th Birthday. Routledge, LondonGoogle Scholar
- Giraud, R. (2004). Framing under risk: Endogenizing the reference point and separating cognition and decision. Cahiers de la MSE Bla04090. Université Paris I, France.Google Scholar
- Koppelberg S. (1989) General theory of Boolean algebras. In: Monk J.D., Bonnet R. (eds) Handbook of Boolean algebras. North Holland, AmsterdamGoogle Scholar
- McKenzie C.R.M., Nelson J.D. (2003) What a speaker’s choice of frame reveals: Reference points, frame selection, and framing effects. Psychonomic Bulletin and Review 10(3): 596–602Google Scholar
- Quattrone G.A., Tversky A. (2000) Constrasting rational and psychological analyses of political choice. In: Kahneman D., Tversky A. (eds) Choice, values and frames. Cambridge University Press, CambridgeGoogle Scholar
- Rubinstein A. (2000) Modeling bounded rationality. MIT Press, CambridgeGoogle Scholar
- Sen A. (1986) Information and invariance in normative choice. In: Heller W.P., Starr R.M., Starret D.A. (eds) Social choice and public decision making (Essays in Honor of Kenneth J. Arrow, Vol. 1). Cambridge University Press, CambridgeGoogle Scholar
- Tversky A., Kahneman D. (2000) Rational choice and the framing of decisions. In: Kahneman D., Tversky A. (eds) Choice, values and frames. Cambridge University Press, CambridgeGoogle Scholar
- Tversky A., Simonson I., Shafir E. (2000) Reason-based choice. In: Kahneman D., Tversky A. (eds) Choice, values and frames. Cambridge University Press, CambridgeGoogle Scholar