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Framing as Path Dependence

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  • GOLD, NATALIE
  • LIST, CHRISTIAN

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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Suggested Citation

  • Gold, Natalie & List, Christian, 2004. "Framing as Path Dependence," Economics and Philosophy, Cambridge University Press, vol. 20(02), pages 253-277, October.
  • Handle: RePEc:cup:ecnphi:v:20:y:2004:i:02:p:253-277_00
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    File URL: http://journals.cambridge.org/abstract_S0266267104000203
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    References listed on IDEAS

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    1. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    2. Arrow, Kenneth J, 1982. "Risk Perception in Psychology and Economics," Economic Inquiry, Western Economic Association International, vol. 20(1), pages 1-9, January.
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    Citations

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    Cited by:

    1. Franz Dietrich & Christian List, 2013. "Where do preferences come from?," International Journal of Game Theory, Springer;Game Theory Society, vol. 42(3), pages 613-637, August.
    2. Dietrich, Franz & List, Christian, 2016. "Reason-Based Choice And Context-Dependence: An Explanatory Framework," Economics and Philosophy, Cambridge University Press, pages 175-229.
    3. repec:hal:journl:halshs-01249514 is not listed on IDEAS
    4. Dino Borie & Dorian Jullien, 2017. "Description-dependent Choices," Working Papers halshs-01651086, HAL.
    5. Sacha Bourgeois-Gironde & Raphaël Giraud, 2009. "Framing effects as violations of extensionality," Theory and Decision, Springer, pages 385-404.
    6. Sacha Bourgeois-Gironde & Raphaël Giraud, 2005. "Accounting for Framing-Effects - an informational approach to intensionality in the Bolker-Jeffrey decision model," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) ijn_00000656, HAL.
    7. Dorian Jullien, 2016. "All Frames Created Equal are Not Identical: On the Structure of Kahneman and Tversky's Framing Effects," GREDEG Working Papers 2016-17, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
    8. Dietrich, Franz & List, Christian, 2016. "Reason-Based Choice And Context-Dependence: An Explanatory Framework," Economics and Philosophy, Cambridge University Press, vol. 32(02), pages 175-229, July.
    9. 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, pages 462-476.

    More about this item

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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