The Frame Effect Revisited: Is Trust able to Transform People from Risk Averse to Risk Taker?
When people have to choose between two equivalent options, they prefer the certain one in gain domain and probabilistic one in loss domain: this is the main statement of Tversky and Kahneman (1981) Frame effect. It has been explained through rational choice theory, according to which people tend to...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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The Bucharest University of Economic Studies Publishing House
2018-11-01
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| Series: | Journal of Emerging Trends in Marketing and Management |
| Subjects: | |
| Online Access: | http://www.etimm.ase.ro/RePEc/aes/jetimm/2018/ETIMM_V01_2018_71.pdf |
| _version_ | 1818140858113851392 |
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| author | Giovanna GALLI Marcello TEDESCHI Maria Cristiana MARTINI |
| author_facet | Giovanna GALLI Marcello TEDESCHI Maria Cristiana MARTINI |
| author_sort | Giovanna GALLI |
| collection | DOAJ |
| description | When people have to choose between two equivalent options, they prefer the certain one in gain domain and probabilistic one in loss domain: this is the main statement of Tversky and Kahneman (1981) Frame effect. It has been explained through rational choice theory, according to which people tend to underestimate large probabilities and therefore to under-evaluate the expected value of a probabilistic choice (Tversky, Kahneman (1981, 1986). Nevertheless, different literature contributions assert trust is able to reduce risk perception and therefore can drive people towards decisions they wouldn’t have taken with high risk perception (Galli, Nardin, 1997; Tedeschi, Galli, Martini, 2017). If this assertion is generally valid, trust should have impact also on frame effect, at least reducing risk aversion in gain domain. Three preliminary tests have been conducted to measure the impact of trust on risk perception in binary choices. Frame effect has been reproduced in three different scenarios, people having to choose between two alternatives with the same expected value, both in gain and loss domain. Each scenario was first tested in its original formulation and then with the introduction of a more detailed description of the context or alternatives, introducing items able to represent cognitive and emotional dimensions of trust. Results confirm risk aversion reduction in gain domain with a ‘magnitudo’ of the effect depending on the trust construct adopted to enrich alternatives. |
| first_indexed | 2024-12-11T10:50:39Z |
| format | Article |
| id | doaj.art-283bc5cf4d05499e853f02189bc07296 |
| institution | Directory Open Access Journal |
| issn | 2537-5865 |
| language | English |
| last_indexed | 2024-12-11T10:50:39Z |
| publishDate | 2018-11-01 |
| publisher | The Bucharest University of Economic Studies Publishing House |
| record_format | Article |
| series | Journal of Emerging Trends in Marketing and Management |
| spelling | doaj.art-283bc5cf4d05499e853f02189bc072962022-12-22T01:10:18ZengThe Bucharest University of Economic Studies Publishing HouseJournal of Emerging Trends in Marketing and Management2537-58652018-11-01I1185191The Frame Effect Revisited: Is Trust able to Transform People from Risk Averse to Risk Taker?Giovanna GALLI0Marcello TEDESCHI1Maria Cristiana MARTINI2University of Modena and Reggio Emilia, Department of Communication and EconomicsUniversity of Modena and Reggio Emilia, Department of Communication and EconomicsUniversity of Modena and Reggio Emilia, Department of Communication and EconomicsWhen people have to choose between two equivalent options, they prefer the certain one in gain domain and probabilistic one in loss domain: this is the main statement of Tversky and Kahneman (1981) Frame effect. It has been explained through rational choice theory, according to which people tend to underestimate large probabilities and therefore to under-evaluate the expected value of a probabilistic choice (Tversky, Kahneman (1981, 1986). Nevertheless, different literature contributions assert trust is able to reduce risk perception and therefore can drive people towards decisions they wouldn’t have taken with high risk perception (Galli, Nardin, 1997; Tedeschi, Galli, Martini, 2017). If this assertion is generally valid, trust should have impact also on frame effect, at least reducing risk aversion in gain domain. Three preliminary tests have been conducted to measure the impact of trust on risk perception in binary choices. Frame effect has been reproduced in three different scenarios, people having to choose between two alternatives with the same expected value, both in gain and loss domain. Each scenario was first tested in its original formulation and then with the introduction of a more detailed description of the context or alternatives, introducing items able to represent cognitive and emotional dimensions of trust. Results confirm risk aversion reduction in gain domain with a ‘magnitudo’ of the effect depending on the trust construct adopted to enrich alternatives.http://www.etimm.ase.ro/RePEc/aes/jetimm/2018/ETIMM_V01_2018_71.pdfframe effectbrand trustinterpersonal trust |
| spellingShingle | Giovanna GALLI Marcello TEDESCHI Maria Cristiana MARTINI The Frame Effect Revisited: Is Trust able to Transform People from Risk Averse to Risk Taker? Journal of Emerging Trends in Marketing and Management frame effect brand trust interpersonal trust |
| title | The Frame Effect Revisited: Is Trust able to Transform People from Risk Averse to Risk Taker? |
| title_full | The Frame Effect Revisited: Is Trust able to Transform People from Risk Averse to Risk Taker? |
| title_fullStr | The Frame Effect Revisited: Is Trust able to Transform People from Risk Averse to Risk Taker? |
| title_full_unstemmed | The Frame Effect Revisited: Is Trust able to Transform People from Risk Averse to Risk Taker? |
| title_short | The Frame Effect Revisited: Is Trust able to Transform People from Risk Averse to Risk Taker? |
| title_sort | frame effect revisited is trust able to transform people from risk averse to risk taker |
| topic | frame effect brand trust interpersonal trust |
| url | http://www.etimm.ase.ro/RePEc/aes/jetimm/2018/ETIMM_V01_2018_71.pdf |
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