Cognitive biases are systematic errors in thinking that affects the decisions and judgments that people make. We often make these biases for one of three reasons.  First, we are cognitive misers. We often do not have the time, the desire or the resources to make a decision, so we go use heuristics - that is, mental shortcuts - to come to a decision.  Sometimes biases influence our decision making because of ego depletion - that is, a lack of self-control or will-power.  Finally, we demonstrate cognitive biases when our cognitive load is too high.  That means that we have too many things on our mind (in our working memory) and this does not allow us the mental resources to reason out a solution.

The framing effect is where people decide on options based on if the options are presented with positive or negative semantics; e.g. as a loss or as a gain. People tend to avoid risk when a positive frame is presented but seek risks when a negative frame is presented. For example, which of these two options looks more appealing to you?

• A product that has been proven effective 80% of the time.
• A product that has failed to work on 2 out of every 10 cases.

Most people would say the first option, even though mathematically they are exactly the same.  Framing things in a positive manner (like the first statement) presents a high rate of success and prevents us from then reasoning to ourselves, "But wait, that means that in 2 out of every 10 cases it failed!"

The following study by Tversky and Kahnemann (1986) is a classic in the study of cognitive biases.

Tversky & Kahneman (1986) aimed to test the influence of positive and negative frames on decision making. The researchers used a self-selected (volunteer) sample of 307 US undergraduate students.

Participants were asked to make a decision between one of two options in a hypothetical scenario where they were choosing how to respond to the outbreak of a virulent disease. For some of the participants, the information was framed positively while for others it was framed negatively.

The scenario read as follows:

Imagine that the U.S. 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 is as follows.

In condition 1, the participants were given the "positive frame."  Their choices were the following:

• If Program A is adopted, 200 people will be saved.
• If Program B is adopted, there is a 1/3 probability that 600 people will be saved, and 2/3 probability that no people will be saved.

In this condition, 72% of the participants chose Program A, whereas only 28% chose program B. 

In condition 2, the participants were given the "negative frame."  Their choices were the following:

• If Program C is adopted 400 people will die.
• If Program D is adopted there is 1/3 probability that nobody will die, and 2/3 probability that 600 people will die.

In this condition, 22% of the participants chose Program C and 78% chose Program D.

It is important to note that the two questions are essentially the same.  Program A is the same as Progam C - and Program B is the same as Program D.

The results clearly demonstrate the influence of the frame. Where information was phrased positively, (the number of people who would be saved) people took the certain outcome, (option A) and avoided the possibility of a loss in the less certain option (option B).  By contrast, when the information was phrased in terms of people dying (a negative frame) people avoided the certain loss (option C) and took a chance on the less certain option D.

The experiment is highly controlled and has high internal validity.  We can conclude that the framing of the situation actually had an effect on the choices made by the participants.  The study is also highly standardized, meaning that it is easily replicable and the results have been shown to be reliable.

However, the study has low mundane realism.  There is no actual threat and there is no fear of losing one's life.  The situation is completely hypothetical.  In a real situation of this nature, there would be a lot of emotion in making a decision. In addition, it is unlikely that an individual would make this decision on his or her own.  Most decisions of such importance are made in consultation with others.

The sample was made up of Western university students.  Wang et al (2016) found higher levels of loss aversion in individualistic cultures.  This is also true of cultures with higher power distance and masculinity.

The framing effect has been applied successfully in marketing as well as in health campaigns.