ECONOMICS

Detailed explanation-1: -Framing bias refers to the observation that the manner in which data is presented can affect decision making. The most famous example of framing bias is Mark Twain’s story of Tom Sawyer whitewashing the fence. By framing the chore in positive terms, he got his friends to pay him for the “privilege” of doing his work.

Detailed explanation-2: -Framing Effect Example: Vaccines Program A will save 200 people. Program B has ⅓ chance of saving 600 and ⅔ chance of saving none. Program A will leave 400 people dead. Program B has ⅓ chance that nobody will die, and ⅔ chance that 600 will die.

Detailed explanation-3: -Framing bias refers to our propensity to be influenced by the manner in which information is presented. A salesperson promoting a product would much rather claim ‘85% of customers were satisfied with the product’ than admit ‘15% of customers were dissatisfied’.

Detailed explanation-4: -Positive frames tend to elicit positive feelings and result in risk taking and proactive behavior. Negative frames tend to elicit negative feelings and result in risk aversion and reactive behavior. Stress and the pressure of time amplify both.