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Framing as Path-Dependence

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Author Info

  • Natalie Gold

    (Balliol College, Oxford)

  • Christian List

    (Nuffield College, Oxford)

Abstract

A “framing” effect occurs when an agent’s choices are not invariant under changes in the way a choice problem is formulated, e.g. changes in the way the options are described (violation of description invariance) or in the way preferences are elicited (violation of procedure invariance). In this paper we examine precisely which classical conditions of rationality it is whose non-satisfaction may lead to framing effects. We show that (under certain conditions), if (and only if) an agent's initial dispositions on a set of propositions are “implicitly inconsistent”, her decisions may be “path-dependent”, i.e. dependent on the order in which the propositions are considered. We suggest that different ways of framing a choice problem may induce the order in which relevant propositions are considered and hence affect the decision made. This theoretical explanation suggests some observations about human psychology which are consistent with those made by psychologists and provides a unified framework for explaining violations of description and procedure invariance.

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File URL: http://128.118.178.162/eps/mic/papers/0211/0211016.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Microeconomics with number 0211016.

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Length: 18 pages
Date of creation: 21 Nov 2002
Date of revision:
Handle: RePEc:wpa:wuwpmi:0211016

Note: Type of Document - PDF; prepared on Windows; pages: 18. Oxford University Department of Economics Series Ref: 124
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Web page: http://128.118.178.162

Related research

Keywords: framing; preference reversal; path-dependence; rationality; deductive closure;

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Cited by:
  1. Franz Dietrich & Christian List, 2010. "Where do preferences come from?," Levine's Working Paper Archive 661465000000001137, David K. Levine.
  2. repec:hal:wpaper:ijn_00000656 is not listed on IDEAS
  3. Sacha Bourgeois-Gironde & Raphaël Giraud, 2009. "Framing Effects as Violations of Extensionality," Post-Print ijn_00432662, HAL.
  4. Whynes, David K. & Frew, Emma J. & Philips, Zoe N. & Covey, Judith & Smith, Richard D., 2007. "On the numerical forms of contingent valuation responses," Journal of Economic Psychology, Elsevier, vol. 28(4), pages 462-476, August.
  5. repec:hal:cesptp:ijn_00000656 is not listed on IDEAS

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