Framing Effect Bias – Part 1

Humans, no matter their intelligence, are cognitively lazy. We have to be.

We’re faced with innumerable decisions every day and, if we gave all them our full, cerebral attention, our lives would be, at best, inefficient. At worst, over very quickly.


When a car is hurtling towards us as we cross a road, we don’t pause to calculate the speed of its approach and compare this to our speed of crossing.  We don’t assess the various probabilities of the car speeding up or slowing down. We don’t assess the road conditions for the effect they may have on braking. We just run.

In crossing the road, as in most other things we do, we rely on mental shortcuts. These are often long-ingrained, learned behaviours. We cross the road the way we do because, on thousands of occasions as children, we were told that roads were dangerous and that, at the sight of a fast-approaching car, we should get out of the way.

We are also riddled with cognitive biases, which also act as mental shortcuts. We have explored how a number of these operate – and effect our betting – elsewhere on the site. In short, though, these are ways that humans are neurologically hardwired to interpret life in certain ways, even when those interpretations are clearly irrational.

For most of human existence, thinking intuitively and automatically has served us well, and it perhaps explains why we have survived evolutionarily where other species have not. For example, we are infested with numerous biases that show us to prefer the familiar to the unusual. During pre-civilisation, this would have seen us violently eject any imposter in our territory, increasing the likelihood that our genes would survive to future generations.

In modern civilisation, though, which relies on complex and chaotic human interactions in an interconnected society, reacting based on these mental shortcuts can be disastrous. Whilst we may want to thump someone who is talking to our sexual partner, doing so is rarely the best decision.

Our cognitive biases don’t end with a preference for the recognisable, though.


Dilemma-Based Experiement

In 2013, Valerie Reyna, a psychology professor at Cornell University, conducted a dilemma-based experiment. She asked participants to consider the following scenarios and decide which course of action they would choose:

“The U.S. is preparing for the outbreak of an unusual disease, which is expected to kill 600 people.

Do you save 200 people for sure, or choose the option with 1/3 probability that 600 will be saved and a 2/3 probability no one will be saved?”

And…

“The U.S. is preparing for the outbreak of an unusual disease, which is expected to kill 600 people.

Do you pick the option where 400 will surely die, or instead a 2/3 probability that all 600 will die and a 1/3 probability no one dies?”

When given the first scenario, most participants chose the first option. When given the second scenario, most chose the second option. In both scenarios, though, the options are statistically identical, demonstrating that it is something about how the options are framed verbally which affects the choices that participants make.

This demonstrates a well-established cognitive shortcoming known as the Framing Effect Bias, where humans make different decisions depending on the language that is used to express the choices available to us, especially when the framing revolves around what we might lose, rather than what we might gain.


Everyday We’re Getting Framed

Retailers and advertisers manipulate this bias regularly, which is why meat is described as 75% lean, rather than 25% fat. Adverts often attempt to create what linguist Norman Fairclough described as synthetic personalisation, a false impression that the product is made specifically for an individual. Because you’re worth it.

The emergence of spin-doctors in the last few decades has seen this verbal framing used in the political world. Whether it’s the likes of Lynton Crosby in Australia, or Karl Rove and Frank Luntz in the US, politicians are winning elections the world over based on the advice of political consultants who exploit the Framing Effect Bias in the language they have their clients use.

Reyna’s Cornell University study findings that such framing biases exist was not revolutionary, of course: in fact, she used virtually identical dilemmas to those employed in a 1981 experiment by Daniel Kahneman and Amos Tversky. What differed in this new experiment was that half of the participants were intelligence agents, and half were college students. And surprisingly, it was the intelligence agents who were significantly more likely to be hoodwinked by the framing of the scenarios.

Reyna concluded that the irrational decision-making of the agents was likely a result of their age and experience. Rather than helping the agents, their veteranship impeded them, as they were more likely to use mental shortcuts learned over the years, rather than carefully analysing the information in front of them. The college students, with less experience, were perhaps driven to concentrate more precisely on what they were being told, as they didn’t have the memory of seemingly similar decisions of the past to cognitively rely on.


So, What’s All This Got To Do With Betting?

Well, on one level, it should serve as a warning for all punters that we need to be careful of, and relentlessly analytical with, any information we process. If we hear that a team has lost their star fullback, it is likely our brains will automatically view this as a catastrophic loss. The reality – that the star will be replaced by another of almost equal skill – is easy to overlook, especially when the media, in search of pre-match news, focus on the perceived loss, endlessly discussing its likely ramifications.

And we should be especially aware of framing bias as we age.  The older we are, the more likely that we will rely on what Daniel Kahneman refers to as “causal schemas”, the mental shortcuts of experience that likely explain the results Reyna’s study. If, over many years of punting, we see lots of frontrunners winning at Caulfield, we may tend to favour frontrunners when punting there in future, without ever confirming the existence or extent of any advantage, or of assessing its probabilistic influence on the outcome of any race.


Conclusion

What the Framing Effect Bias tells punters, like all the cognitive biases we examined, is that having a rigorous process for placing bets based on quantifiable information is the way to ensure you make a long-term profit.

Or should that be, “…is the way to ensure you don’t lose everything you have.”


ABOUT THE AUTHOR – JACK HOUGHTON 

As a passionate sports’ fan and punter, Jack has written about sports and betting for over a decade, winning the Martin Wills Award for racing journalism in 2002 and writing Winning on Betfair for Dummies, first published in 2006 and now in its second edition, having sold over 35,000 copies in two languages.


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