Framing Effect 16.422 Prospect theory People value a certain gain more than a probable gain with an equal or greater expected value, the opposite is true for losses Would you rather win(or lose)$l and 0% risk or $2 with 50/50 risk? Take the sure thing Framing effect: Choices are made differenti depending on whether the choices are framed in terms of gains or losses Sunk cost bias How does this impact design?Framing Effect • Prospect theory - People value a certain gain more than a probable gain with an equal or greater expected value; the opposite is true for losses. – Would you rather win (or lose) $1 and 0% risk or $2 with 50/50 risk? – Take the sure thing? • Framing Effect: Choices are made differently depending on whether the choices are framed in terms of gains or losses • Sunk cost bias • How does this impact design? 16.422