Login
Register
Framing Bias
What Is Framing Bias?
Framing bias occurs when decisions are influenced by how information is presented rather than the information itself. The same choice can lead to different decisions depending on wording or context.
Why It Matters
Framing bias can lead to inconsistent or irrational decisions. It affects how people perceive:
- risk and reward
- gains vs losses
- investment opportunities
- financial products
How Framing Bias Works
Framing influences decisions when:
- outcomes are presented as gains vs losses
- wording emphasizes certain aspects
- context shapes perception
- emotional responses are triggered
People react differently depending on how choices are framed.
Example
An investment described as having a “90% success rate” may feel more appealing than one described as having a “10% failure rate,” even though they are the same.
Framing Bias vs Anchoring
- Framing bias depends on presentation.
- Anchoring depends on initial reference points.
FAQs About Framing Bias
Why does framing matter?
It shapes perception and emotional response.
Does framing affect financial decisions?
Yes, significantly.
How can I avoid it?
Focus on underlying data, not presentation.
Related Terms
