Framing effect
Topic: Schools of Economic Thought and Economic Laws · NCERT: Beyond NCERT
Meaning
The framing effect means that the same information, presented in different ways, leads to different choices. Describing an outcome as a gain or as a loss changes how people react, even though the facts are the same. It comes from prospect theory (Kahneman-Tversky, 1979), which says people judge outcomes as gains or losses from a reference point. It matters for marketing, public messaging and nudges.
Example
Patients accept surgery far more readily when told it has "90% survival" than when told it has "10% mortality". The two statements say exactly the same thing.
Don't confuse with
- Anchoring: relying too much on the first number seen. Framing is about whether the same facts are worded as a gain or a loss.
Related concepts
- Behavioural economics
- Bounded rationality
- Satisficing
- Heuristics
- Anchoring
- Availability heuristic
- Confirmation bias
- Overconfidence bias
- Prospect theory
- Loss aversion