Thursday, August 27, 2015

Make a choice

I'll write the logic of this post below, but lets start with an exercise where you have to make choices. Ready?

First one:
You're the leader of a country and you're population is facing a new recently found deadly disease. Your medical staff gave you two options of test treatments to apply on 600 people:

Make a choice for a Treatment
This is what we're facing. You have to choose one option.

Second one:
Now, a contingent country is facing similar problem. The leader of that country asked you for advice. His medical staff presented him with the following treatment options:

Make a choice for a Treatment
Again, You have to choose one option.

Let's look at the logic. Last year (2014) I wrote a post about "The power of feedback" and how a framing effect could be used to leverage that power. What you just witnessed is a pure example of framing.

In 1981, Amos Tversky and Daniel Kahneman explored how different phrasing affected participants responses to a choice in a hypothetical life and death situation. Participants were asked to choose between two treatments for 600 people affected by a deadly disease. Treatment A was predicted to result in 400 deaths, whereas treatment B had a 33% chance that no one would die but a 66% chance that everyone would die. This choice was then presented to participants either with positive framing (e.g.: how many people would live), or with negative framing (e.g.: how many people would die).

Make a choice for a Treatment

As you can see, both options have the same outcome for Treatment A and Treatment B. However, Treatment A was chosen by 72% of participants when it was presented with positive framing ("saves 200 lives") dropping to only 22% when the same choice was presented with negative framing ("400 people will die").

What were your choices?
Another cool context for this effect: "93% of PhD students registered early when a penalty fee for late registration was emphasized, with only 67% doing so when this was presented as a discount for earlier registration". This kind of frame is very common in sales and marketing.

You can read the study published in the Science Magazine here.

The above example was adapted from Wikipedia.