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Framing as path dependence

Research output: Contribution to journalArticle

Natalie Gold ; Christian List

Original languageEnglish
Pages (from-to)253-277
Number of pages25
JournalECONOMICS AND PHILOSOPHY
Volume20
Issue number2
DOIs
StatePublished - Oct 2004

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Abstract

A framing effect occurs when an agent’s choices are not invariant under changes in the way a decision problem is presented, e.g. changes in the way options are described (violation of description invariance) or preferences are elicited (violation of procedure invariance). Here we identify those rationality violations that underlie framing effects. Applying a model by List (2004), we attribute to the agent a sequential decision process in which a “target” proposition and several “background” propositions are considered. We suggest that the agent exhibits a framing effect if and only if two conditions are met. First, different presentations of the decision problem lead the agent to consider the propositions in a different order (the empirical condition). Second, different such “decision paths” lead to different decisions on the target proposition (the logical condition). The second condition holds when the agent's initial dispositions on the propositions are “implicitly inconsistent”, which may be caused by violations of “deductive closure”. Our account is consistent with some observations made by psychologists and provides a unified framework for explaining violations of description and procedure invariance.

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