Behavioral Economics

Do You Know That You Are Being Framed!🤷‍♂️👉

Let’s start with some questions. These are easy ones, no tricks at all. Answer what comes to your mind first. 1. Here are two toothpaste brands on the shelf, advertised as below. Everything else is same, which one will you go for?👉

2. Two burgers here (pardon my sketching). Which one will you go for? I am assuming that you want to consume less fat👉👉

👉🏿By the way, both the options in the questions 1 and 2 are exactly the same. Doesn’t matter which one you chose.

3. Now there are three burgers, but A is out of stock, which one will you choose?👉

👉🏿If you chose B over A in the question 3, you got deceived. B has 3% fact but C has 1% fat. No problem. Read on.

4. Two circles, A and B which one is bigger?👉

5. You will buy Two umbrellas, which one you’ll buy. Both are same brands, everything else is same.👉

👉🏿 Again both the options in question 4 and 5 are exactly the same. Even both the circles are of exactly the same size. What I just demonstrated to you is called ‘framing bias’ or ‘framing effect’ in behaviour economics or the list of cognitive biases.

Framing Effect means: The framing effect is when our decisions are influenced by the way information is presented. In other words, our decision is influenced by how the information is presented rather than what is being said. Decision makers often tend to ignore the facts presented but focus on how the facts are presented. Don’t worry. If you got trapped or even confused in any of the questions above, you are not always getting fooled. Sometimes our time is too important to analyse inconsequential decisions of life – buying a wrong toothpaste just because the advertiser framed the ad smartly won’t make any difference to you in the long run. Chill. However, for important, consequential decisions, have a look at how the information is presented. Then reframe it in your mind, evaluate options individually and then choose. Buying an inferior or a pricier car or house just because the seller framed their product smartly may turn out to be a bad investment.

In summary: Our decision is not just dependent on the options available to us but also on how these options are presented. We get influenced by the way options are framed – its wordings, reference points, and emphasis, comparison, positive or negative emotions etc. We need to be conscious of this bias.