Volume 6, Number 3, 175-182, DOI: 10.1007/BF00995109

Exploring the boundaries of the framing effect: The moderating roles of disparate expected values and perceived costs of judgmental errors

James J. Kellaris, Frank R. Kardes and Theresa Dinovo

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Abstract

Framing effects on retail store choice decisions were investigated in four experiments. Subjects preferred the store that guaranteed (a ldquosurerdquo option) good prices (experiment 1), product availability (experiment 2), or a rebate (experiment 3) when consequences were framed in terms of gains; subjects preferred the risky option when consequences were framed in terms of losses. Consistent with fuzzy-trace theory, framing effects were reduced when the expected values of options were disparate in a direction that disfavored sure gain or probabilistic loss options (experiment 2) and when the perceived costs of committing a judgmental error were high (experiment 3). Experiment 4 shows that the moderating effects of disparate expected values and costs of judgment errors generalize to within-subject designs.

Key words  Prospect theory - decision frames - framing effect - judgmental biases

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