Overview
The framing effect is the shift in preferences that occurs when logically equivalent options are presented in different frames. Rational choice theory says that wording should not change choices, but Tversky and Kahneman (1981) showed experimentally that this assumption fails.
The key experiment and prospect theory
Tversky and Kahneman posed a hypothetical policy problem in which 600 lives were at stake. Offered "200 people will be saved for sure" or "a one-third chance that all 600 are saved and a two-thirds chance that no one is saved", 72% chose the sure option. When the same options were worded as "400 people will die for sure" or "a one-third chance that nobody dies and a two-thirds chance that all 600 die", 78% chose the risky option.
The result is explained by Kahneman and Tversky's (1979) prospect theory. People evaluate outcomes as gains and losses relative to a reference point, avoid risk when facing gains and seek risk when facing losses, and feel a loss more strongly than a gain of the same size, a pattern called loss aversion. This matters especially in financial decisions that weigh gains against losses, such as insurance, savings and investment products.
Three types
Levin and colleagues (1998) distinguish three types of framing:
- Risky-choice framing: options with different risks are described as gains or losses, as in the experiment above.
- Attribute framing: a single feature of an object is described positively or negatively. In Levin and Gaeth's (1988) study, ground beef labelled "75% lean" was rated better in taste and quality than the same beef labelled "25% fat".
- Goal framing: a message stresses either what is gained by acting or what is lost by not acting.
Limitations and debate
The size of framing effects varies greatly by type and task, and they can weaken when people know the topic well or are prompted to think carefully. Some argue that even "equivalent" wording carries information about the speaker's intentions. News framing in media research is related but often treated as a separate concept.
Uses in marketing, financial decisions and policy
In marketing, framing makes the same terms look different, for example "discount" versus "free extra", or monthly versus annual pricing; in policy it is discussed together with nudge designs such as default enrolment in pension or savings schemes. For consumers, recalculating financial products or price plans in a common unit (total cost, annual rate) is a way to reduce the influence of framing. The pull of a starting number is covered under the anchoring effect, and the reluctance to lock in losses under sunk cost.
Sources reviewed: 2026-10-16
References
- Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263–291.
- Tversky, A., & Kahneman, D. (1981). The framing of decisions and the psychology of choice. Science, 211(4481), 453–458.
- Levin, I. P., & Gaeth, G. J. (1988). How consumers are affected by the framing of attribute information before and after consuming the product. Journal of Consumer Research, 15(3), 374–378.
- Levin, I. P., Schneider, S. L., & Gaeth, G. J. (1998). All frames are not created equal: A typology and critical analysis of framing effects. Organizational Behavior and Human Decision Processes, 76(2), 149–188.