Wednesday, January 11, 2006

The Framing Trap

If you start off from the wrong foot you will never get there. The first step in making a decision is by asking the question. If the wrong question is asked your mind will be anchored by the way it is asked then the decision is deemed to be wrong. There are 2 types of framing traps, they are:

  1. Frames as Gains vs Losses – we naturally want to avoid losses. Researches have revealed that people are risk averse when a problem is posed in terms of gains but risk seeking when a problem is posed in terms of avoiding losses.

  2. Framing with different reference – different reference points will get different responses. Studies have shown that many people would refuse the 50-50 chance for a choice with reference point of zero (neutral) but accept a choice with positive reference point putting things into perspective by emphasizing the real financial impact of the decision.

What can you do about this? You can

  • Always reframe the problem in various ways and observe distortions caused by the frames;

  • Try posing problems in a neutral, redundant way that combines gains and losses or embraces different reference points

  • Deliberate hard throughout the process about framing trap. At the end ask yourself if you would change your mind if the question is asked differently;

  • When others recommend decisions, examine the way the framed the question. Challenge them with different frames.

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