Framing Effects in Choices With Somewhat Risky Options

When a certain option and a risky option are both described as potential gains, people typically choose the certain option; when the same two options are described as potential losses, people typically choose the risky option. This famous preference pattern is the risky-choice framing effect. Despite the seeming rarity of sure things and all-or-none risks in real life, surprisingly little research on this effect has involved options with intermediate levels of risk. In this research, we identified four types of “somewhat risky” options, combined them with each other and with certain and all-or-none options to create 15 risk comparisons in both gains and losses in each of four domains (cancer, drought, investment, and wildfire), and conducted two preregistered experiments in which we varied risk comparisons between or within participants in both student and online samples (N = 2,586 after exclusions). We found significant framing effects in almost all risk comparisons, greatly expanding the range of decisions in which framing is relevant. In addition, we assessed how well 12 versions of risky-choice theories accounted for participants’ choices. Across experiments and samples, versions of prospect theory (PT) and transfer-of-attention-exchange theory (TAX) generally outperformed versions of fuzzy-trace theory (FTT), the priority heuristic, and other accounts. PT’s and TAX’s performance was largely due to the S-shaped value function rather than the theories’ other mechanisms (e.g., PT’s loss aversion, TAX’s weight transfer). FTT’s performance was harmed by its failure to predict framing effects in choices between certain options and somewhat risky options without zero outcomes.