Comparing two tiny giants or two huge dwarfs? Preference reversals owing to number size framing

Kwong, Jessica Y. Y.

doi:10.1016/j.obhdp.2005.04.002

Cited by 36 publications

(36 citation statements)

References 40 publications

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“…observed that there is little difference in our evaluation of a 1 in 10,000 and a 1 in 10,000,000 chance of winning the lottery . Wong and Kwong also revealed that individuals place a higher value on an attribute that differentiates two alternatives when it is framed with small numbers (e.g., sound quality of 0.003% vs. 0.01%, in which the values indicate the percentage of noise in signal) rather than large numbers (e.g., sound quality of 99.997% vs. 99.99%, in which the values indicate the percentage of 1—[noise in signal]) . Similarly, prospect theory accounts for the fact that individuals tend to over‐ or underweight low or high probabilities and to weight losses more heavily than gains .…”

Section: Introductionmentioning

confidence: 78%

Toward an Understanding of the Influence of Cultural Background and Domain Experience on the Effects of Risk‐Pricing Formats on Risk Perception

Fraser-Mackenzie¹,

Sung²,

Johnson³

2014

Risk Analysis

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Risk information framing can be a powerful tool for aiding the communication of risk and improving decision-making. However, little work has investigated the extent that these framing effects depend on the characteristics of the perceiver. In our study, we examine whether the effects of different risk-pricing formats on risky choices are the same for all individuals, no matter their domain experience or cultural background, or whether there are interactions between these factors. Survey 1 revealed that three risk-pricing formats of the same choice problem resulted in the same individuals making different risky choices (preference reversal);suggesting that risk-perception was distorted by the risk-pricing format manipulation. In Survey 2, the effects of the risk-pricing formats were shown to differ by the participants' cultural background (Asian vs. European) and the extent of their domain experience. The fact that there were no differences between the cultural or domain experience groups in their overall tendency to select riskier (cf. safer) choices indicates that risk behavior differences between groups are often closely linked to perceptual, rather than simply attitudinal, cognitiveprocesses. The results demonstrate the complex, interactive cognitive processes that are used to encode risk information, involving the framing of the information and the cultural background and previous experiences of the individual. We conclude that it is important to consider the characteristics of the individual (e.g., culture, domain experience, etc.) when manipulating riskinformation framing with the aim of improving their risk communication.Key words: framing, culture, risk-information, domain-experience, risk-communication 2 Acknowledgement:We should like to thank Professor Michael Siegrist and the anonymous reviewers for their very helpful comments and suggestions on an earlier draft of this paper.3

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Section: Introductionmentioning

confidence: 78%

Toward an Understanding of the Influence of Cultural Background and Domain Experience on the Effects of Risk‐Pricing Formats on Risk Perception

Fraser-Mackenzie¹,

Sung²,

Johnson³

2014

Risk Analysis

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“…Wong and Kwong (2005) HiFi systems, compact disk changers, job candidates for a computer programming job, airline travel.…”

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confidence: 99%

Preference reversals: The impact of truth-revealing monetary incentives

Berg

Dickhaut

Rietz

2010

Games and Economic Behavior

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“…There are relatively fewer studies that apply this theory to riskless decision making (e.g. Kahneman et al, 1990;Highhouse, 1996;Wong and Kwong, 2005;Bonaccio and Reeve, 2006;Huber et al, 2008). As far as we know, there are no studies similar to ours in that they test whether prospect theory can explain riskless choice in decision tasks based on real offers from an actual company (although Bonaccio and Reeve, 2006 also use quite realistic decision scenarios).…”

Section: Introductionmentioning

confidence: 82%

Where Do You Want to Go Skiing? The Effect of the Reference Point and Loss Aversion

Gocmanová¹,

Skorkovský

Veselý

et al. 2019

Acta Univ. Agric. Silvic. Mendelianae Brun.

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We reported the results from a simple experiment where participants (n = 646) picked their preferred winter holiday from three possible alternatives. To make the experiment as realistic as possible, the alternatives among which participants could choose, were very similar to actual winter holidays offered by an existing travel agency. Our results are consistent with predictions made by prospect theory: alternatives that compare favorably to a reference option are chosen more often than alternatives that compare unfavorably to a reference option. The reference option, experimentally manipulated in this paper, was one of the three alternatives available to participants. Including different reference alternatives into the available choice set changed relative preferences over the remaining alternatives. Our findings provide further evidence that prospect theory can have practical implications for marketers who can influence consumer choice by merely presenting specially composed sets of alternatives.

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Comparing two tiny giants or two huge dwarfs? Preference reversals owing to number size framing

Cited by 36 publications

References 40 publications

Toward an Understanding of the Influence of Cultural Background and Domain Experience on the Effects of Risk‐Pricing Formats on Risk Perception

Toward an Understanding of the Influence of Cultural Background and Domain Experience on the Effects of Risk‐Pricing Formats on Risk Perception

Preference reversals: The impact of truth-revealing monetary incentives

Where Do You Want to Go Skiing? The Effect of the Reference Point and Loss Aversion

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