Management, Sport and Tourism Departmental Seminar

Event status:

Affective Forecasts for Certain Options, but Not Risky Options, Explain Framing Effects

Date:
Thursday 20 May 2021 11:00 am until Thursday 20 May 2021 12:00 pm (Add to calendar)
Contact:
Dr Jasvir Kaur Nachatar Singh
j.nachatarsingh@latrobe.edu.au
Presented by:
Dr Jennifer Spoor & Dr Wes Moons (UCLA)
Type of Event:
Seminar/Workshop/Training; Public

Prior research demonstrates that when faced with a decision involving risk, how the options are framed affects the ultimate decision: people tend to be conservative and risk averse when the options emphasise potential gains, but they tend to embrace risk when the options emphasise potential losses. This preference reversal in framing problems is often explained in terms of the loss aversion principle within prospect theory. In the present research, we propose that affective forecasting (i.e., predictions of ‘how would I feel after making this choice?’) offers a novel explanation for preference reversals. Using variations of the ‘unusual disease problem’, we demonstrate that participants’ predictions for how they will feel after choosing either the risky or certain option account for framing effects. Moreover, participants’ affective forecasts related to choosing the certain option, but not the risky option, mediate framing effects on decisions. The results have implications for improving decision-making in careers, management, and public health.

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