Framing Effect

  • Behavior
  • Cognitive Bias

Framing Effect biases you towards drawing different conclusions from the same information based on how that information is presented. Specifically if the information is presented positively or negatively. An individual may choose a riskier option because it's positive outcomes were highlighted. On the opposite, an individual may make defensive choices when the negatives of a new option are mainly presented.

Examples of Framing Effect

  • An investment in a risky asset class like crypto currency when focusing on the high gains.
  • An unwillingness to update to faster tools when risk of updating is presented first.
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