The Effects Of Decision Framing Influences On Decision Performance

Abstract

This study investigates the effects of two components of decision framing [commitment and verbalization] in decision optimization, and how information quality impacts framing effects on decision performance. The theory of cognitive dissonance predicts that commitment to a decision will foster insensitivity to alternative choices. We find that such bias can be beneficial in certain decision strategies, and more powerfully influential as information quality worsens. We used an interactive computer simulation to test decision framing effects in a profit optimizing business simulation and to examine the magnitude of the framing effect under varying conditions of information quality, which was proxied as cost information type (ABC: higher quality; VBC: lesser quality). The influences of these factors were tested on the profit optimizing abilities of 48 accounting majors under controlled, laboratory conditions. Results showed that framing influences improved decision-making, and the effects of framing influences were more powerful in decision environments of poorer quality information [VBC] than in higher quality decision environments [ABC]. Framing was most supportive of decisions when most needed, poor information environments, and not of significant influence in clearer decision environments.