STUDIES - Tversky and Kahneman

Question 1

Aim

Answer 1

• To investigate the influence of positive and negative frames on decision-making

Question 2

Procedure

Answer 2

SAMPLE

• Self-selected (volunteer) sample of 307 US undergraduate students

STEPS

• Participants were asked to decide between 1 of 2 options in a hypothetical scenario where they were choosing how to respond to the outbreak of a virulent disease
• Scenario: US is preparing for outbreak of a disease which is expected to kill 600 people and 2 programs have been proposed

Participants were allocated to 2 groups:

• Group 1 (“positive” frame):
  — Program A: 200 people saved
  — Program B: 33% chance that 600 people will be saved and 66% that no one will
• Group 2 (“negative” frame):
  — Program C: 400 people will die
  — Program D: 33% chance that nobody will die and 66% that 600 people will die

(Both choice sets are identical but different in wording, either in terms of potential gains (“will be saved”) or potential losses (“will die”))

Question 3

Results

Answer 3

• Group 1: Program A: 72% and Program B: 28%
• Group 2: Program C: 22% and Program D: 78%
• Majority of Group 1 chose Program A as they are trying to avoid risk of not saving anyone at all (66% chance)
• Majority of Group 2 chose Program D as they are more willing to take the risk to save as many people as possible (400 deaths are as bad as 600 so risk is worth it)
• Tversky and Kahneman’s explanation was that the groups had a different reference point:
  — Group 1: Reference point is future state (600 people dead), so options are perceived as potential gains (how many people can I save?)
  — Group 2: Reference point is present state (600 people alive), so options are perceived as potential losses (how many people can I lose?)

Question 4

Findings

Answer 4

• People tend to engage in risk-taking behaviour when they are presented with a negative frame and more likely to avoid risks in positive frames
• We tend to assign less positive value to gains and more negative value to losses
  — When information is phrased positively (number of people saved), people took certain outcome and avoided possibility of loss in uncertain outcome
  — When information is phrased negatively (number of people dead), people avoided certain loss and took a chance on uncertain loss

Question 5

Strengths

Answer 5

• High internal validity: The experiment is highly controlled, and we can conclude that the framing of the situation actually had an effect on the choices made by the participants
• High reliability: The study is highly standardised, so it is easily replicable, and the results are thus reliable

Question 6

Limitations

Answer 6

• Cultural differences: Sample is made up of Western university students, and a study by Wang et al found that people with more individualistic cultures are more averse to risk than those from a collectivist culture
• Low ecological validity: The study has low mundane realism, as there is no actual threat and in a real situation of this nature, there would be a lot of emotion in making a decision that is not even made in consultation with others