Erratum: Bonus of rebate?: The impact of income framing on spending and saving

Abstract

Bonus of Rebate?: The Impact of Income Framing on Spending and Saving. By N. Epley, D. Mak and L. C. Idson (Journal of Behavioral Decision Making, Vol. 19, No. 3, pp. 213–227, 2006). DOI: 10.1002/bdm.519The above paper was published with an error in the title. The title should read: Bonus or Rebate?: The Impact of Income Framing on Spending and Saving.

When more is less in financial decision-making: financial literacy magnifies framing effects

“…This reflection has been referred to as 'loss aversion' (cf. Kahneman & Tversky, 1979) and has been reported in consumer, health, and economic decision-making processes (Diacon & Hasseldine, 2007;Epley, Mak, Idson, 2006;McNeil, Pauker, Sox, & Tversky, 1982;Sanford, Fay, Stewart, & Moxey, 2002). Further evidence has suggested that framing effects and, by extension, loss aversion, are part of an affective type 1 heuristic process (Cassotti et al, 2012;Kahneman & Frederick, 2007).…”

Compensation and Rewards for Environmental Services (CRES) and efficient design of contracts in developing countries. Behavioral insights from a natural field experiment

“…This accompanies the assumption that people tend to maintain stable preferences over time and are not affected by the framing of the income they receive. 2 However, evidence shows some deviations from these predictions (Shapiro and Slemrod, 2003;Epley et al, 2006;Milkman and Beshears, 2009), which are difficult to explain under this theoretical framework (e.g. tax rebates failing to boost the economy and coupons leading to unusual consumption patterns).…”

“…Although there are many reasons why people may choose to spend or save, Epley et al (2006) and Epley and Gneezy (2007) suggest that the way people label these rebates may have a significant impact. Windfalls are more likely to be saved when labeled as a refund, and they are more likely to be spent when labeled as a bonus.…”

“…Windfalls are more likely to be saved when labeled as a refund, and they are more likely to be spent when labeled as a bonus. To test this prediction, Epley et al (2006) and Epley and Gneezy (2007) ran an experiment involving 47 undergraduate students from Harvard University. In this experiment, participants received a $50 check as they arrived in the laboratory.…”