Influences of Temporal Distances, Cover Story, and Probability on Framing Effect

Abstract

When making choices, people are sensitive to the way in which the problem is presented. This sensitivity was well exemplified by the framing effect initially described by Tversky and Kahneman (1984). In the well-known "Asian disease problem ", they found that the majority were risk averse when the options of the problem were framed positively, yet turned to be risk seeking when the options were framed negatively. The first study was to investigate 625 Chinese college students’ cognitive relativity in different temporal distances and cover stories. The results of the questionnaire survey showed the main effect of temporal distances and cover stories were both significant, and the effect of interaction was also significant. It showed the greatest cognitive relativity when the temporal distance was 1 year under the bad cover story. The second study used scenarios that were similar to the Asian disease problem to research how the characteristics of the cover stories framing effects and probability levels influence risk preference in different temporal distances. In order to examine whether temporal distances (1 week, 1 year, 5 year and 50 year), the characteristics of the cover stories (good vs. bad) and the probability of outcomes (high vs. median vs. low) would affect people's risk preference, the scenarios were designed to begin with four different temporal distances, therefore, there was a four 2 (the cover story: good vs. bad) × 3 (probabilities: high vs. median vs. low) × 2 (outcome framing: positive v s. negative) mixed designs with probabilities as the within participants variable and the other three factors as between participants variables. McNemar test and logistic regression were performed for the analysis. The results were as follows: (1) When temporal distance was 1 week, under bad cover story, the difference among three probabilities were significant in the number of pursuing sick; when the probability was 95%, the main effect of cover story and the effect of interaction between cover story and outcome framing were significant; (2) Framing effect was found only on high probabilities level under bad cover story when temporal distance was 1 week.