What is Framing?

Framing refers to the way in which information is presented to people and how this presentation can influence their decision-making. Framing effects can occur because people often use mental shortcuts, or heuristics, to process information and make decisions quickly and efficiently. These mental shortcuts can lead to biases in judgment, as people may not always consider all of the relevant information or may weigh certain pieces of information more heavily than others.

For example, consider a person who is deciding whether to undergo a medical procedure. If the procedure is described in terms of its potential benefits, such as a high success rate and low risk of complications, the person may be more likely to choose the procedure. On the other hand, if the procedure is described in terms of its potential costs, such as the time and discomfort involved, the person may be less likely to choose the procedure. In both cases, the person is making a decision based on the same information, but the way in which the information is presented, or "framed," can influence their decision.

Understanding framing effects is important for making decisions in a variety of contexts, including financial decision-making. By being aware of how information is presented and the potential biases that may result, people, can make more informed and objective decisions.

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