Attention and Framing

Abstract

We consider individual decision-making where every alternative appears with a frame (a la Salant and Rubinstein (2008)), for instance a chocolate in a gift-box. The decision maker is subject to inattention that leads to random choice. A novelty in our work is that we explicitly model framing effects as the source of inattention and hence the randomness in choice. We characterize two random choice rules that exhibit the effects of frames in drawing the decision maker's attention: the first rule, called the frame-based stochastic choice rule states that the choice probability of an alternative (say, x) is the joint probability of attention drawn by its frame and the probability that attention is not drawn by the frames which are associated with the alternatives in the set that are preferred to x. This rule attributes the variation in attention to the frame associated with an alternative. The second rule, called the suitable frames rule illustrates the relative effects of frames in drawing attention, i.e. a particular frame f may render an alternative x more attractive to the decision maker compared to y when f is associated with them respectively. Thus the effect of a particular frame may vary from one alternative to another. According to this rule, the probability with which the decision maker chooses an alternative with a frame is the joint probability of paying attention to it and the probability of not paying attention to all the other products that contain alternatives in frames that are suitable to them relative to the product whose probability is being computed. All the primitives of the model are identifiable.