Contingent Focus Model of Decision Framing Under Risk

Abstract

Decision problems which are identical in form may give rise to different decisions due to subjective decision framing, in which the decision-making process can be altered depending on how the situation is described. This is called the framing effect. We applied the Contingent focus model (Takemura, 1994a) to an explanation of the framing effect. The model hypothesizes that a risk attitude depends on the extent to which a subject focuses on possible outcomes and probabilities, that is the focusing hypothesis, and focusing on possible outcomes and probabilities are, in turn, contingent on contextual factors including positive/negative frame condition, that is the contingent focus hypothesis. In order to test these hypotheses, we implemented two experiments (n = 180 for both experiments), which manipulated size of letters describing outcomes and probabilities. The results were compatible with predictions derived from the hypotheses, that is, the subjects more frequently selected risky options when outcomes were emphasized. We also applied the model to a psychometric meta-analysis of subjects' responses in experiments of Asian disease problem (Tversky & Kahaneman, 1981; Takemura, 1994b) and one of the experiments of this study (4 experiments; n = 831). The results were also compatible with predictions derived from the hypotheses.  Corresponding author: Tokyo Institute of Technology, Department of Civil Engineering, 2-12-1, Ookayama, Meguro-ku, Tokyo, 152-8552, tel & fax: +81-3-5734-2590 e-mail: fujii@plan.cv.titech.ac.jp

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