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Framing effects and the reinforcement heuristic

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  • Alós-Ferrer, Carlos
  • Hügelschäfer, Sabine
  • Li, Jiahui

Abstract

We examine the effect of win/loss framing on individuals’ use of a reinforcement heuristic in an incentivized probability-updating task. A loss frame strengthens the basic impulse to shift away from an unsuccessful option, but only if this option was chosen freely before.

Suggested Citation

  • Alós-Ferrer, Carlos & Hügelschäfer, Sabine & Li, Jiahui, 2017. "Framing effects and the reinforcement heuristic," Economics Letters, Elsevier, vol. 156(C), pages 32-35.
    • Handle: RePEc:eee:ecolet:v:156:y:2017:i:c:p:32-35
    DOI: 10.1016/j.econlet.2017.03.038
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    References listed on IDEAS

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    1. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    2. Anja Achtziger & Carlos Alós-Ferrer, 2014. "Fast or Rational? A Response-Times Study of Bayesian Updating," Management Science, INFORMS, vol. 60(4), pages 923-938, April.
    3. Gary Charness & Dan Levin, 2005. "When Optimal Choices Feel Wrong: A Laboratory Study of Bayesian Updating, Complexity, and Affect," American Economic Review, American Economic Association, vol. 95(4), pages 1300-1309, September.
    4. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
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    Cited by:

    1. de la Rue du Can, Stephane & Khandekar, Aditya & Abhyankar, Nikit & Phadke, Amol & Khanna, Nina Zheng & Fridley, David & Zhou, Nan, 2019. "Modeling India’s energy future using a bottom-up approach," Applied Energy, Elsevier, vol. 238(C), pages 1108-1125.
    2. Carlos Alós-Ferrer & Alexander Jaudas & Alexander Ritschel, 2021. "Effortful Bayesian updating: A pupil-dilation study," Journal of Risk and Uncertainty, Springer, vol. 63(1), pages 81-102, August.
    3. Jung, Dominik & Erdfelder, Edgar & Bröder, Arndt & Dorner, Verena, 2019. "Differentiating motivational and cognitive explanations for decision inertia," Journal of Economic Psychology, Elsevier, vol. 72(C), pages 30-44.
    4. Sautua, Santiago I., 2020. "When diversification clashes with the reinforcement heuristic: An experimental investigation," Journal of Economic Behavior & Organization, Elsevier, vol. 174(C), pages 196-211.
    5. Huang, Daqiang & Li, Yuzhen & Li, Jiahui, 2023. "Anodal transcranial direct current stimulation over the right dorsolateral prefrontal cortex: Less risk taking or more reflective? A tDCS study based on a Bayesian-updating task," Journal of Economic Psychology, Elsevier, vol. 99(C).
    6. Alós-Ferrer, Carlos & Ritschel, Alexander, 2018. "The reinforcement heuristic in normal form games," Journal of Economic Behavior & Organization, Elsevier, vol. 152(C), pages 224-234.

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    More about this item

    Keywords

    Framing; Reinforcement heuristic; Bayesian updating;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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