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. Nevertheless, different literature contributions assert trust is able to reduce risk perception and therefore can drive people towards decisionsthey wouldn’t have taken with high risk perception. 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.

The Frame Effect Revisited: Is Trust able to Transform People from Risk Averse to Risk Taker? / Galli, Giovanna; Tedeschi, Marcello; Martini, Maria Cristiana. - In: JOURNAL OF EMERGING TRENDS IN MARKETING AND MANAGEMENT. - ISSN 2537-5865. - 1:(2018), pp. 185-191. ((Intervento presentato al convegno Emerging Trends in Marketing and Management tenutosi a Bucharest, Romania nel September 27th-29th, 2018.

The Frame Effect Revisited: Is Trust able to Transform People from Risk Averse to Risk Taker?

Giovanna GALLI;Marcello TEDESCHI;Maria Cristiana MARTINI
2018

Abstract

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. Nevertheless, different literature contributions assert trust is able to reduce risk perception and therefore can drive people towards decisionsthey wouldn’t have taken with high risk perception. 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.
2018
Emerging Trends in Marketing and Management
Bucharest, Romania
September 27th-29th, 2018
1
185
191
Galli, Giovanna; Tedeschi, Marcello; Martini, Maria Cristiana
The Frame Effect Revisited: Is Trust able to Transform People from Risk Averse to Risk Taker? / Galli, Giovanna; Tedeschi, Marcello; Martini, Maria Cristiana. - In: JOURNAL OF EMERGING TRENDS IN MARKETING AND MANAGEMENT. - ISSN 2537-5865. - 1:(2018), pp. 185-191. ((Intervento presentato al convegno Emerging Trends in Marketing and Management tenutosi a Bucharest, Romania nel September 27th-29th, 2018.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11380/1169226
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