Series 2, Episode 3: Framing Bias
To demonstrate what Framing is all about, let’s go to that supermarket and stand ourselves in front of the yoghurt section. Now, imagine you are staring at the yoghurts - you have to also imagine that you actually want to buy yoghurt, else this won’t really work! - so, you’re staring at the yoghurts and they have been arranged into two sections.
The first section of yoghurts has a big sign overhead that reads THESE YOGHURTS ARE 80% FAT FREE.
The section next also has a big sign, except this one reads THESE YOGHURTS CONTAIN 20% FAT.
Now, In deciding what to buy, we will be naturally drawn to the positive message more than the negative message - even knowing that the two yoghurts are the same thing, your attention is pulled towards the 80% fat free version, more than the contains 20% fat versions.
This message - 80% fat free versus 20% fat, is Framing in practice. In other words, Framing is where our decisions are affected simply by the way information is being presented to us, and the more negatively framed, the more we try and avoid it. Frame something positively, and we are like a moth flying towards a flame.
THE POWER OF A POSITIVE FRAME
Imagine a TV advert that tried to sell its product by saying 2 out of 10 people didn’t like this product, instead of what they actually do say, which is 8 out of 10 like this product. Positive framing matters - a great deal. It’s also why doctors use this technique when giving people a prognosis for an illness. Using the phrase “there is 90% chance I can successfully treat this illness” gives you hope, whereas if they said “there is a 10% chance I won’t be able to treat you successfully”... well, that just fills you with despair. Positive framing is an incredibly powerful influencer in how we take in and process information.
But framing is also used by bad people, people who like to spend their lives scamming people and ripping them off. They know that we are drawn to positive frames, but they also know that we rarely dig deeper, and explore the information that is being presented to us. In other words, they know that we have a tendency to take information on face value without question and without testing if what is being said, is actually correct.
There was a real case of this recently where people invested their money in what looked like a genuinely good investment. Except, it was mainly down to the way it was framed that made it appear like a good investment. It used phrases like “400 positive reviews from existing investors” and “100% track record in repaying investor’s capital”.
The problem is, we take this information on face value and say “wow… 400 positive reviews. It must be good”. But, let’s stop for a second and ask ourselves two really important questions that we need to know the answer to, before we can ever know if that statement - 400 positive reviews - is good or not. The questions are (1) what is the total number of reviews they had? and (2) what is their definition of positive?
Number 1 is important because if they had 5,000 reviews and 400 were positive, but 4,600 were negative, then that paints a very different picture. In other words, only showing us one side of the story is not giving us all the facts to make an informed decision. Number 2 - what is their definition of positive? Because they don’t tell us this, we don’t know if they have made a choice that anything above 2 stars (let’s assume a 5 star scale) is positive. We don’t know this. It might be 3 stars, 4 starts - but we don’t know, so we can’t assume that what we believe is a positive review is actually a positive review.
The other statement they use is “100% track record in repaying investor’s capital”.
Now, next to this statement was a tiny little asterisk - a tiny little star telling us there is more information in the small-print. But, they rely on that very common human behaviour of not bothering to read the small print. Now, and let’s be honest with ourselves here. How many times have you swiped through the terms and conditions on your mobile phone when it’s updated, without having any idea what you are legally agreeing to? We do it all the time, and it’s the same for small-print when people are trying to get you to buy something, or in this case, invest your money. But, because it’s framed in a positive way, “100% track record”, we click straight through and rarely, if ever, explore the evidence or the facts that sit behind it.
Over 11,000 people invested money in this company I am talking about before the company went into administration. Those people lost a total of £236m between them, with a high likelihood that they will never get their money back. Just remember, if it seems too good to be true, it probably is.
So two great tips when dealing with framing. First off, force yourself to look for, or see, the alternative. And secondly, don’t take information or advertising on face value.
If you did those two things, you’d end up making decisions that are more fact-based, more evidence-based, and that’s a good place to get to.
Remember, when you see a yoghurt that says 80% fat free, it’s only showing one side of the story, so take your time to figure out what the other 20% is before you make your choice.
That’s it for this episode. In the next episode we’ll be looking at a behavioural bias that frequently appears alongside Framing. We’ll be looking at the Anchoring Bias.