Affect and the Framing Effect within Individuals over Time: Risk Taking in a Dynamic Investment Simulation

Seo, Myeong Gu; Goldfarb, Brent; Barrett, Lisa Feldman

doi:10.5465/amj.2010.49389383

Cited by 68 publications

(43 citation statements)

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“…Studies have demonstrated that whether something is a gain or loss is measured relative to a reference point (Tversky & Kahneman, 1981, 1986. That is, reference point may be shifted and as a result, individuals' risk attitudes may change significantly (Gonzalez et al, 2005;Larraza-Kintana, Gomez-Mejia, & Wiseman, 2011;Levin, Gaeth, Schreiber, & Lauriola, 2002;Seo, Goldfarb, & Barrett, 2010;Tversky & Kahneman, 1981, 1986. Specifically, Tversky and Kahneman (1981) have shown that the reference point can also be shifted by a mere labeling of outcomes.…”

Section: Discussionmentioning

confidence: 99%

Risk Attitude towards Mandatory Retirement Protection in Hong Kong: Why Are Risky Investments More Attractive?

Wong¹

2014

ASS

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The government of Hong Kong Special Administrative Region (HKSAR) launched the Mandatory Provident Fund (MPF) scheme as a major source of retirement protection. Now, over 2.6 million employees and self-employed persons are currently making contribution to this scheme and they are required to decide on allocation of their MPF contributions to different MPF choices. However, we know little about how their decisions are formed. One major contribution of this study is to investigate people's perceptions of MPF and their preferences of MPF choices. And, this study has adopted the predictions of prospect theory, in order to explain why risky choices are more attractive to the public. Findings indicated that more individuals perceived MPF contribution as a loss, than those who perceived it as a gain; those who perceived MPF as a loss generally made higher contributions to the risky fund.

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Section: Discussionmentioning

confidence: 99%

Risk Attitude towards Mandatory Retirement Protection in Hong Kong: Why Are Risky Investments More Attractive?

Wong¹

2014

ASS

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“…Debit or credit can represent a positive and negative, gain and loss, allocation and source. Seo et al (2010) have examined the role of affect (pleasant or unpleasant feelings) and decision frames (gains or losses) in risk taking of stack investment. After experiencing losses, individuals made more risky choices, in keeping with the framing effect.…”

Section: Framing Effectmentioning

confidence: 99%

Debit Credit Framing Effect in the Investment Alocation Decision

Mujilan

2017

KINERJA

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This study aims to test the effect of accounting information in the investment decision if information is framed in debit or INTRODUCTIONAccounting information is important for the managers and other stakeholders in the decisions proces. However, there is posibility that the decicion makers only watch the exibished financial information without consider the full meaning of accounting information based on its sources and alocations. Moreover, if the information provided has been framed for the information provider interest. Tvesrsky & Kahneman (1981) said that framing effect make the change of individual preferences when the same case is framed by different way. Framing effect has been widely studied in the decicion making, the prospect theory (Kahneman & Tversky, 1979) then be the most theory to explain the framing effect. Prospect theory is the result of the critize to the utility theory. But in the growed time, the fuzzy-trace theory also indicated has the power to explain framing effect in the accounting context (Chang et al. 2002;Arifin 2003).In the former study framing-effect likely tested in the form of positive or negative information that imply the existence of a profit or loss, but aren't specifically to compare the information based on debit and credit in the accounting. This study attempts to develop or formulate the framing instrument that essenced in accounting debit credit concept. Incompleteness debit and credit information as an example can be found likely informing the increasing assets (debit) but didn't inform that the increasing was due to an increase in the debt or equity (credit).This study tries to find what is the framing effect if information give only one side debit or credit. The focus study is the effect of framing in the portfolio investment decision. The accounting knows that the transaction has two impact on debit and credit. Debit is the alocation and credit is the source. Incompletness information make miss perception in the judgment process. So, this study will test the effect of framing in the information of asset vs liabilites, asset vs equity, asset vs revenue, and expense vs revenue.The assumption of this this study are (1) repondents haven't have the understanding of framing effect, so their decision are based on how to interprete and favor of received information. (2) Respondents understand about the kind information of assets, liabilities, equities, revenue, and expense. (3) Respondents can use the information in the judgment of how much fund portion to invest.This study aims to make experimental in the form of accounting information framing effect if the given information showing nominal value in debit side only or credit side only. This study also give effort to develop the instrument in the form of statement cases after vew some former references in framing cases.The research contributions are, first to give understanding and viewpoint about the impact of assymmetry information by framing accounting information. The framing is in the form of serving account i...

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“…The conceptual distinction between approach and avoidance is important in the decision making, motivation, and personality literatures, yet minimal work has investigated its role in goal striving Seo, Goldfarb, et al, 2010). My research program presented formal models that acknowledge the role of goal framing in goal level choice and affective experiences.…”

Section: Contributions To the Literaturementioning

confidence: 99%

“…Without an understanding of the dynamics of these processes, it is not possible to explain and predict the goal level choices of individuals as they engage in goal striving. Similarly, recent studies have identified that particular affective states can impact on behaviours and perceptions that relate to goal striving Seo, Goldfarb, & Barrett, 2010;). However, the affective processes that occur during goal striving remain poorly understood, rendering it difficult to explain how affect changes during goal striving .…”

Section: Modelling Dynamic Affective and Decision Making Processes Dumentioning

confidence: 99%

Modelling Dynamic Affective and Decision Making Processes during Approach and Avoidance Goal Striving

Gee¹

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This thesis examined the cognitive processes by which individuals engage in goal level choice and the affective processes that individuals experience during approach and avoidance goal striving. The aim was to develop a set of formal theories that can explain and predict the trajectories in goal level choice and affective states as individuals strive towards goals framed as desirable or undesirable end-states. These formal theories provide an explanation of processes at multiple levels of analysis, and incorporate constructs from the work motivation, self-regulation, emotion, personality, and decision making literatures. Data from three experimental studies were analysed using multi-level techniques and computational modelling in order to test the proposed theories. The findings are reported within three manuscripts that form the body of this thesis.Manuscript 1 investigated goal level choice as a cognitive process involving an interaction of decision making, risk preferences, personality, and learning. A computational model was developed in order to describe and predict how individuals make goal level choices over time.Drawing from the decision making literature, the model specifies that goal level choice at the within-person level can be explained by a dynamic anchoring and adjustment process and a risk preference bias. The model further specifies that between-person variability in risk preferences can be partly explained by an interaction of goal framing and trait neuroticism. An experimental study was conducted to evaluate this model. Participants were randomly allocated to strive towards approach or avoidance framed goals as they performed a medium-fidelity Air Traffic Control (ATC) simulation task across 10 trials. At the beginning of each trial, participants chose among five goal levels. The findings of this study indicated that our hypothesized model was able to account for the trajectories of goal level choices over time. Manuscript 1 contributed to the goal striving literature by identifying relevant cognitive processes in goal level choice.Manuscripts 2 and 3 investigated the affective processes that emerge as individuals strive towards a chosen goal level in approach and avoidance contexts. Manuscript 2 presented a scale validation study for the momentary affect scale (MAS), which was developed in order to measure the dynamics of affective experiences during goal striving. As part of the scale validation, it was necessary to address the conceptual question of whether the affect scale should consist of unipolar or bipolar items. Participants performed a medium-fidelity ATC simulation task and were repeatedly measured on a set of unipolar and bipolar affect items. Multi-level confirmatory factor analyses were used to evaluate the problem of unipolarity versus bipolarity and to validate the MAS against the latent constructs being measured. The findings of this study provided evidence of bipolarity in the structure of affect and indicated that the MAS can be used to measure rapid changes in affec...

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Affect and the Framing Effect within Individuals over Time: Risk Taking in a Dynamic Investment Simulation

Cited by 68 publications

References 91 publications

Risk Attitude towards Mandatory Retirement Protection in Hong Kong: Why Are Risky Investments More Attractive?

Risk Attitude towards Mandatory Retirement Protection in Hong Kong: Why Are Risky Investments More Attractive?

Debit Credit Framing Effect in the Investment Alocation Decision

Modelling Dynamic Affective and Decision Making Processes during Approach and Avoidance Goal Striving

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