Downloadable - About University

368 Decision framing and cognitive inertia
choices. Such incomplete appraisal of a decision may result in a failure
to examine the risks of preferred decisions and a failure to work out
contingency plans if the preferred course of action fails. A high level
of group cohesiveness and a high external source of threat or stress
are primary antecedents of groupthink. Overall, the consequences of
groupthink will tend to magnify inertia processes.
Framing effects have also been well documented in the behavioral
decision literature. For example, recall the following problem called the
‘Asian Disease Problem’ which we referred to in Chapter 5:
Imagine that the US is preparing for the outbreak of an unusual Asian disease,
which is expected to kill 600 people. Two alternative programs to combat the
disease have been proposed. Assume that the exact scientific estimate of the
consequences of the programs are as follows:
If Program A is adopted, 200 will be saved. If Program B is adopted, there is
a 1/3 probability that 600 people will be saved, and a 2/3 probability that no
people will be saved.
If you had to make the choice, which of the two programs would you
favor? If you are like most of Tversky and Kahneman’s 27 respondents
you will tend to favor Program A. Such a choice is risk averse, inthat
the prospect of certainly saving 200 lives is more attractive than a risky
prospect of equal expected value. However, imagine if, instead, you had
been presented with the same cover story but with a different statement
of the outcomes of the alternative programs, as follows:
If Program C is adopted, 400 people will die.
If Program D is adopted, there is a 1/3 probability that nobody will die, and
a 2/3 probability that 600 people will die.
In this formulation of the Asian Disease Problem, most respondents
favor Program D. This option is risk taking in that the certain death of 400
people is less acceptable than the two-in-three chance that 600 will die.
As Tversky and Kahneman argue, choices involving gains (e.g.
between Programs A and B) are often risk averse and choices involving
losses (e.g. between Programs C and D) are often risk taking. Notice
that the choice between A and B is identical to the choice between C and
D. The only difference is that the first choice emphasizes lives saved
and the second choice emphasizes lives lost. This simple change of frame
produces a dramatic shift in choice.
Russo and Schoemaker argue that, without realizing it, we tend to see
reality through one frame at a time and that, once locked into a frame,