Framing is a concept from behavioral ecnomics that explains how the presentation of options affects decision making. Specifically, framing explains why, when presented with mathmatically or economically identical choices, people will tend to choose the option presented in terms of the positive outcome.
Q. So, we wanted to do something Belmont related today. Why do “frames” fit it?
A. Because they have so much to do with how we choose between different options that involve odds. They could easily impact your choice of a horse this weekend.
Q. Alright, well I know we’ve got a graphic that illustrates the point.
A. Yep, here it is… is summarizes an experiment run among a bunch of Harvard medical school students. They were told about the odds of treating cancer patients, either by radiation or by surgery. Over a five year period, surgery had the better outcome, but of course there are risks in doing the operation.
- About those risks, half the students were told: the operation has a 90% survival rate after one month.
- The other half were told: the operation has a 10% mortality risk during the first month.
- And now let’s look at their responses: 83% of the first group recommended surgery; but only half the second group did.
Q. So even though the odds were exactly the same in the two cases, the phraseology radically altered which course of treatment the doctors chose.
A. Right, in this literally life and death decision, made by super smart people, they let the framing of the question change the outcome. If you state the question with the emphasis on the positive—survival—you get a lot more buy in than stating it negatively—mortality.
Q. And so this translate into picking horses?
A. Sure: Paynter’s odds this am were 8:1. So if I say to you, you’ll make $160 profit on just a $20 wager, you’re more likely to bet than if I point out there’s an 84% chance that he’ll lose… even though these are exactly the same idea, stated two different ways.