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[Tversky
and Kahneman] "The rational theory of choice assumes description
invariance: equivalent formulations of a choice problem should give
rise to the same preference order. Contrary to this assumption,
there is much evidence that variations in the framing of
options (e.g., in terms of gains or losses) yield
systematically different preferences - with reliance on
how information is presented, a judgment is made on the benefit
of a choice". |
[Shefrin]
"The term Frame Dependence means that the
way people behave depends on the way that their decision problems
are framed. It is a cognitive heuristic in which people tend to
reach conclusions based on the 'framework' within which a situation
was presented". |
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Rational
Choice and the Framing of Decisions, Tversky and Kahneman, 1986
"Alternative descriptions of a decision problem often give
rise to different preferences, contrary to the principle of invariance
that underlies the rational theory of choice. Violations of this
theory are traced to the rules that govern the framing of decision |
Metaphors
and the market: Consequences and preconditions of agent and object
metaphors in stock market commentary, Morris, Sheldon, Ames
and Young, 2005
It is well established in economics that day-to-day trends in
the stock market follow a random walk, meaning that today’s trend
does not predict tomorrow’s trend. Nevertheless, financial journalists,
whether print or television, do not merely report market trends
but also explain them. Reporters cannot merely report the amount
of increase or decrease or say "it was another random walk
today". They are supposed to provide their audience with
a story - an explanation of why the market moved the way it did.
These hinted explanations undoubtedly make market reports more
engaging; however, they may lead the audience to unwarranted expectations
about tomorrow's trend".
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