Framing effects in public goods: Prospect Theory and experimental evidence

Iturbe-Ormaetxe, Iñigo; Ponti, Giovanni; Tomás, Josefa; Ubeda, Luis

doi:10.1016/j.geb.2010.10.004

Cited by 32 publications

(17 citation statements)

References 19 publications

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“…A large number of studies have demonstrated that the way a decision is presented can have a considerable impact on people's behavior. For example, there is ample evidence from social dilemma experiments that behavior differs depending on whether the choice situation is framed as "taking from" a common pool or as "giving to" a common pool (e.g., Andreoni, 1995a;McCusker and Carnevale, 1995;Sonnemans et al, 1998;van Dijk and Wilke, 2000;Iturbe-Ormaetxe et al, 2011;Dufwenberg et al, 2011;Cubitt et al, 2011;Cappelen et al, 2013;Dreber et al, 2013;Messer et al, 2013;Zhang and Ortmann, 2014). Several potential explanations have been put forth.…”

Section: Introductionmentioning

confidence: 99%

Framing and Misperception in Public Good Experiments

Fosgaard

Hansen

Wengström

2016

Scandinavian J Economics

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Earlier studies have found that framing has a substantial impact on the degree of cooperation observed in public good experiments. We show that the way the public good game is framed affects misperceptions about the incentives of the game. Moreover, we show that such framing‐induced differences in misperceptions are linked to the framing effect on subjects' cooperation behavior. When we do not control for the different levels of misperceptions between frames, we observe a significant framing effect on subjects' cooperation preferences. However, this framing effect becomes insignificant once we remove subjects who misperceive.

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Section: Introductionmentioning

confidence: 99%

Framing and Misperception in Public Good Experiments

Fosgaard

Hansen

Wengström

2016

Scandinavian J Economics

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“…The loss function is generally steeper than the gain function, describing that the same amount is weighted more heavily when lost than when gained. Notably, prospect theory is increasingly accepted by economists, and efforts have been made to integrate it into existing theories on game play (Dijk & Wilke, 2000;Iturbe-Ormaetxe, Ponti, Tomása, & Ubeda, 2011). A prominent example is the work by Andreoni (1995), who suggested that players associate positive externalities of their own actions with a 'warm glow' and negative externalities with a 'cold prickle'.…”

Section: Valence Framing Effectsmentioning

confidence: 99%

Another frame, another game? Explaining framing effects in economic games

Gerlach¹,

Jaeger²

2016

Preprint

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Small changes in the framing of games (i.e., the way in which the game situation is described to participants) can have large effects on players' choices. For example, referring to a prisoner's dilemma game as the "Community Game" as opposed to the "Wall Street Game" can double the cooperation rate (Liberman, Samuels, & Ross, 2004). Framing effects are an empirically well-studied phenomenon. However, a coherent theoretical explanation of the observed effects is still lacking. We distinguish between two types of framings - valence framing and context framing - and provide an overview of three general classes of theories that may account for the observed changes in behaviour.

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“…In experimental economics, reference dependence has long been acknowledged and analysedoften called framing effect (Andreoni 1995;Iturbe-Ormaetxe et al 2011;Sonnemans et al 1998). In environmental economics, reference dependence was brought forward in the discussion on the gap between willingness-to-pay and willingness-to-accept-compensation measures (Kahneman et al 1990;Knetsch 2010).…”

Section: The Reference Point In the Climate Change Contextmentioning

confidence: 99%

Prospect theory, mitigation and adaptation to climate change

Osberghaus

2016

Journal of Risk Research

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. AbstractClimate change is one of the most pressing challenges in current environmental policy. Appropriate policies intended to stimulate efficient adaptation and mitigation should not exclusively rely on the assumption of the homo oeconomicus, but take advantage of well-researched alternative behavioural patterns. Prospect theory provides a number of climate-relevant insights, such as the notion that evaluations of outcomes are reference dependent, and the relevance of perceived certainty of outcomes. This paper systematically reviews what prospect theory can offer to analyse mitigation and adaptation. It is shown that accounting for reference dependence and certainty effects contributes to a better understanding of some well-known puzzles in the climate debate, including (but not limited to) the different uptake of mitigation and adaptation amongst individuals and nations, the role of technical vs. financial adaptation, and the apparent preference for hard protection measures in coastal adaptation. Finally, concrete possibilities for empirical research on these effects are proposed.

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Framing effects in public goods: Prospect Theory and experimental evidence

Cited by 32 publications

References 19 publications

Framing and Misperception in Public Good Experiments

Framing and Misperception in Public Good Experiments

Another frame, another game? Explaining framing effects in economic games

Prospect theory, mitigation and adaptation to climate change

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