Framing as path-dependence

Working paper

A 'framing' effect occurs when an agent's choices are not invariant under changes in the way a choice problem is formulated, e.g. changes in the way the options are described (violation of description invariance) or in the way preferences are elicited (violation of procedure invariance). In this paper we examine precisely which classical conditions of rationality it is whose non-satisfaction may lead to framing effects. We show that (under certain conditions), if (and only if) an agent's initial dispositions on a set of propositions are implicitly inconsistent, her decisions may be path-dependent, i.e. dependent on the order in which the propositions are considered. We suggest that different ways of framing a choice problem may induce the order in which relevant propositions are considered and hence affect the decision made. This theoretical explanation suggests some observations about human psychology which are consistent with those made by psychologists and provides a unified framework for explaining violations of description and procedure invariance.

Authors: Gold, N; List, C

• Publication status: Published
• Publisher: University of Oxford
• Series: Department of Economics Discussion Paper Series
• Publication date: 2002-10-01
• Paper number: 124
• Keywords: deductive closure; path-dependence; preference reversal; framing; rationality