Chapter 15 of PSYCHOMarketing by Roger Nichols
In 1981, behavioral psychologists Daniel Kahneman and Amos Tversky conducted an experiment by handing out questionnaires to college students about a theoretical disease outbreak they claimed would lead to the death of up to 600 people. According to them,
“It is often possible to frame a given decision problem in more than one way. Alternative frames for a decision problem may be compared to alternative perspectives on a visual scene. Veridical [that is, truthful or genuine] perception requires that the perceived relative height of two neighboring mountains, say, should not reverse with changes of vantage point. This also applies to reversals of preference by variations in the framing of acts, contingencies, or outcomes. These effects have been observed in a variety of problems and in the choices of different groups of respondents. Here we present selected illustrations of preference reversals, with data obtained from students at Stanford University and at the University of British Columbia who answered brief questionnaires in a classroom setting.”
The students were divided into different groups and given different scenarios. The scenarios are listed below.
Group 1: “Program A” will save 200 people, “Program B” has a third probability that up to 600 people will be safe, and a 2/3 chance that none of them will survive the epidemic.
Group 2: “Program C” will kill 400 people, and “Program D” has a 1/3 probability that none of the people will lose their lives.
When the scenarios given to the two groups were compared, it could be seen that the first group received a positive version, while the second got a negative one. Moreover, the results showed that 72% of subjects in the first group went with “Program A,” while 22% of the second group went with “Program C.”
Upon observation of the programs, it could be seen that Programs “A” and “C” were the same, while “B” and “D” were the same. Ironically, the subjects chose Programs “A” and “D” because they were portrayed as risk-minimal. The researchers proved that humans go for options framed positively rather than those framed negatively.
Let’s take a look at some examples:
- Contraceptive pills are 85% effective, or contraceptive pills fail 15% of the time.
- The method is 80% effective, or only two out of
10 customers have complained about the product.
- There is a 90% probability that this investment plan will yield profit, or there is a 10% probability that this investment might crash.
The truth is that most, if not all of us, will go for the first part of the sentence rather than the second. Why this is so is simple: even though the two options are identical, the first part exudes optimism, while the other section is pessimistic.