The Framing Effect

In this video I introduce Tversky and Kahneman’s work on the framing effect and how consideration of benefits or losses can influence the choices that people make and their willingness to take risks. I consider a few everyday examples of this, then consider how the framing of default options may also influences the choices we make, as demonstrated in Eric Johnson and Daniel Goldstein’s work looking at opt-in and opt-out organ donation programs in different countries.

Daniel Kahneman – Thinking, Fast and Slow (Amazon) http://amzn.to/2nAWnop

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Video Transcript:

Hi, I’m Michael Corayer and this is Psych Exam Review. In this video we’re going to look at another effect that was studied by Amos Tversky and Daniel Kahneman. So for this I’d like you to imagine a hypothetical situation that we have a rare virus outbreak and it’s going to affect this 600 person village. So what you have to do is decide one of two programs in order to confront this situation. If you choose program A then 200 people will be saved. If you choose program B then there’s a one-third chance that everyone will be saved and a two-thirds chance that no one will be saved. So which of these programs would you adopt?

Now half of the participants in Tversky and Kahneman’s study received the same question about this rare virus outbreak in a village of 600 people but the program options that they received were slightly different. What they received said okay if you choose program A 400 people will die. If you choose program B then there’s a one-third chance that no one will die and a two-thirds chance that everyone will die. Which program would you like to choose?

Now you can think about your own answer when I first framed this question. Of course the participants didn’t know that there were different versions of these forms. You can think about which program sounds better in either case. What Tversky and Kahneman found is that in the first situation Program A was popular. People liked saving the 200 lives.

In the second version, same question and mathematically identical answers, right, you can probably notice that, you know, program A is the same thing here, program B is the same thing but in the second case program B was more popular. So what’s going on?

Well, what’s the difference between these framings here? How are they, how are the programs framed in different ways? Well, the first framing is all about people being saved and the second is about people dying. So based on this Tversky and Kahneman suggested that when it comes to thinking about benefits people like to be certain. They like certainty. They’d like to know that this is what I’m getting, this is the benefit of this program: 200 people are going to be saved. That sounds good.

But when it comes to thinking about losses, people want to avoid losses and they’re willing to take risks to avoid losses. So we start thinking about the people that are going to die, you’re thinking about the losses and as a result you’re willing to take riskier options. That’s why program B is suddenly more popular because people like, you know, I don’t like to think about 400 people dying, I will take a chance to try to save everyone. I will risk it, I’ll roll the dice and see what happens. Maybe we can save everyone, maybe we can avoid these losses altogether.

Ok so this shows how the way that we frame choices, the way we describe them, the words that we choose, and whether we’re thinking about the benefits or the losses influences our decision making. We see this all the time in daily life. You see medications, for instance, focus on their benefits. They tell you that they have a you that they have a 30% failure rate. Or when you go to a gas station would you rather see a sign that there’s a cash discount if you pay with cash or that there’s a credit card fee? Do we think of this as a reward for using cash, a benefit, or do we think of it as a loss, as a penalty for using a credit card? Maybe that will influence which people prefer.

We also see this in politics. We see that the way that certain programs are described will influence whether people like them or not. Do we decide that a program should be described as helping the needy or is it providing welfare, which is a term that has negative connotations? People want to avoid a welfare state and so they may find that they like a program that provides assistance to the needy and they don’t like a program that’s providing welfare, even though the program may be exactly the same thing.

So how we frame things matters. It influences the choices that people make and how we frame the default options also matters. So now we’ll look at a study by Eric Johnson and Daniel Goldstein and what Johnson and Goldstein did was they looked at organ donation programs and they looked at whether the program was an opt-in program or an opt-out program.

So what that means is in an opt-in program you have to choose to be a part of the organ donation program. In other words, you’re not in the program until you check that little box that says I want to join the organ donation program. In an opt-out program it says you’re in the organ donation program. If you don’t want to be in the organ donation program then you have to check this box that says I do not want to be in the organ donation program.

So the question is, how does this influence what people choose? The answer seems to be that if it’s an opt-in program, enrollment rates are lower. Countries that have an opt-in program tend to have lower rates of enrollment in their organ donation programs. Countries that have an opt-out situation where you’re part of the program unless you choose not to be tend to have much higher rates of enrollment in their organ donation programs.

So what this demonstrates is that how things are framed, how we see things as a default option of being in this program or not, has an influence on the decision we make. This is a decision that, you know, is tough to make. Perhaps I mean there’s, you know, philosophical and religious implications of thinking about what’s going to happen to your body after you die. I mean that might be a hard question to try to even begin to think about and so rather than think about it the easier choice is just let this form decide. The people who designed it, let’s just go with whatever happens and then I don’t have to think about it. Then I don’t have to consider all the implications of this.

Now this also means that we’re sort of sacrificing our free will a bit to the people who design the forms, right? We tend to just go with however things are framed and we tend not to think about you know whether or not we really want to be a part of this program or not. Now of course you can say for yourself “well that’s how other people behave and not me. I would think about it and I would have my choice of whether I’m in the organ donation program or not” but if we look at the average you’re probably like most people and you probably won’t actually do that.

You’ll tend to go with the crowd just like many other people do. Ok, so this shows how framing really does matter and if you think about how we design questions, how we design possible programs, whether we focus on the benefits or the losses and that’s going to influence the decisions that people make and how risky people might want to be in making those decisions. I hope you found this helpful, if so, please like the video and subscribe to the channel for more.

Thanks for watching!

Problem Solving

In this video I introduce several concepts related to problem-solving. I begin with mental set, which refers to our tendency to rely on approaches that have worked in the past. Similarly, functional fixedness refers to our tendency to think of tools as having single fixed uses and this may cause us to overlook novel uses for them. Convergent thinking refers to approaches leading to a single solution, while divergent thinking refers to coming up with many possible solutions which may not be related to one another.

 

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Video Transcript:

Hi, I’m Michael Corayer and this is Psych Exam Review. In this video I want to introduce some ideas related to problem solving.

So how do we solve problems? Well, sometimes the way that we solve problems is that we don’t actually have to solve them. We have a memory for a solution and we simply need to bring it to mind.

For instance, if I ask you to solve two plus two you can immediately tell me that the answer is four and you don’t really have to go through any problem-solving steps. Whereas at some point in the past you did actually have to solve this problem, you had to work at it and find the solution and you

probably did this by physically representing the problem, you know, on your fingers and then counting one two three four. Ok, two plus two is four and now you have that solution and you memorize it and you can bring it to mind later when you need it and it’s not going to change.

So sometimes we simply call on our memory for how we’ve solved the problem in the past. Now this can lead us to a problem in that sometimes we call upon old solutions that aren’t going to work for new problems and this brings us to what’s called mental set.

So mental set is the idea that we use a problem-solving approach that has worked in the past but it might not necessarily work for a new problem but it’s sort of the first thing that we go to. So for instance if you’ve had problems with your computer in the past and you’ve solved these problems simply by restarting your computer and that’s resolved the issue then if you have a new problem with your computer you’re likely to try restarting your computer to solve this problem, even if that solution isn’t necessarily going to work. That would be a demonstration of your mental set. You have an approach to solving computer problems which is to restart the computer and you try that with a new problem even though you don’t know if it’s going to work and it may not resolve the issue that you’re having.

Now we also have this tendency to rely on past solutions when it comes to how we use tools because we tend to think of the usefulness of tools in terms of how we’ve used them before or how they’re generally used and so when we’re referring to tools we call this functional fixedness and this is the idea that the functions of tools are seen as fixed, they don’t change. We use a tool for a particular purpose and that purpose only.

So for instance if you were trying to hang a picture on your wall and you need to hammer a nail into the wall you might go and get your tool box and then you open it up and you remember that you lent your hammer to a friend last weekend and you forgot to get it back. Now you might think well “I guess I can’t hang up the picture today” instead of realizing that there’s a wrench in front of you and you could use the wrench to drive a nail into the wall and in this case that would pretty much work just as well as a hammer. You might overlook this because of functional fixedness. You think of hammers are for hammering things wrenches are for wrenching things and you fail to see that you could use the wrench as a hammer.

This functional fixedness is often described as an error in problem-solving but I don’t really think it’s an error because a lot of the time functional fixedness is a good thing. It keeps us from damaging our tools and ruining their ability to perform their special task that they’re designed for. So we don’t always want to think of all the possible uses for something. I mean sure you could use your cell phone to hammer a nail into a wall that would probably work. It would get the job done but in doing that you destroy the functions that your cell phone is specifically designed to perform. In that case functional fixedness isn’t really an error. Sure you don’t think of using your cell phone as a hammer but most of the time that’s probably a good thing.

Ok, so thinking about the different uses for tools brings us to consider the difference between convergent thinking and divergent thinking. So what do these refer to?

Convergent thinking is when we have a problem that has a single solution and so all the steps that we take, all the approaches that we have should all point us to this one solution. Think of it as we have a single solution and everything we do should point us toward that solution.

For instance, if you’re solving an algebra equation and you’re solving for X and there’s one answer that X can be, then each of the steps that you take in solving this problem should get you closer to finding that answer of what is X, right? So we have many approaches that all point us to a single solution. This is convergent thinking. Everything converges onto one solution.

In contrast, we also have what’s called divergent thinking and in divergent thinking we diverge from a single point. We have a starting point and then we have multiple solutions and these solutions sort of go off in different directions and by that I mean they may not be related to one another at all. So this is a bit more creative, right? We have to come up with new unrelated ideas for maybe how we could use a particular tool. That would be an example of divergent thinking.

So if you took your hammer and you said “what are all the possible things that I could use a hammer for?”, you’re going to come up with many different answers and they’re not going to be related to one another. So you say “okay I could use a hammer as a paperweight or I could use it to help me reach something that’s just out of reach. If I had a hammer and then I’d get a little a little bit longer reach and maybe I could you know knock something off the shelf” or you could say “well maybe I could use it to prop a door open so I don’t get stuck outside or, you know, I could use it as a weapon if I needed to or maybe I could use it as a clock, in which case it’s always hammer time”.

But anyway this shows us that we have multiple different solutions to a problem and they’re not related to one another and so this creativity comes from this divergent thinking; trying to come up with new unrelated solutions and this is something we might not do as often as convergent thinking where we’re focused on finding a single solution to a single problem.

Ok, so that’s mental set and functional fixedness and the difference between convergent and divergent thinking. I hope you found this helpful, if so, please like the video and subscribe to the channel for more.

Thanks for watching!