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A big fish or a small pond? Framing effects in percentages

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  • Li, Meng
  • Chapman, Gretchen B.

Abstract

This paper presents three studies that demonstrate people’s preference for a large percentage of a small subset over a small percentage of a large subset, when the net overall quantity is equated. Because the division of a set into subsets is often arbitrary, this preference represents a framing effect. The framing effect is particularly pronounced for large percentages. We propose that the effect has two causes: A partial neglect of the subset information, and a non-linear shaped function in the way people perceive percentages.

Suggested Citation

  • Li, Meng & Chapman, Gretchen B., 2013. "A big fish or a small pond? Framing effects in percentages," Organizational Behavior and Human Decision Processes, Elsevier, vol. 122(2), pages 190-199.
  • Handle: RePEc:eee:jobhdp:v:122:y:2013:i:2:p:190-199
    DOI: 10.1016/j.obhdp.2013.07.003
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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. Dimitri, Carolyn & Greene, Catherine R., 2002. "Recent Growth Patterns In The U.S. Organic Foods Market," Agricultural Information Bulletins 33715, United States Department of Agriculture, Economic Research Service.
    3. Heath, Timothy B & Chatterjee, Subimal & France, Karen Russo, 1995. " Mental Accounting and Changes in Price: The Frame Dependence of Reference Dependence," Journal of Consumer Research, Oxford University Press, vol. 22(1), pages 90-97, June.
    4. Tversky, Amos & Kahneman, Daniel, 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
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