A Holistic Review of Framing Effect: Theories and Applications

Abstract

Framing effect is an important judgemental bias observed in human behavior. However, despite numerous theoretical and empirical progressions on framing effect in economics, there are still shortcomings to rationalize the discussion. This paper tries to provide a comprehensive understanding of current research on framing effect by discussing/ its definition, its relationship with preferences, and its current theoretical stage. More specifically, its application in people's retirement social benefit choosing behavior is extensively discussed. Based on the current literature about framing, this paper also points out the potential future directions of theoretical and empirical research.