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Testing the internal consistency of the standard gamble in ‘success’ and ‘failure’ frames

Oliver, Adam (2004) Testing the internal consistency of the standard gamble in ‘success’ and ‘failure’ frames. Social Science and Medicine, 58 (11). pp. 2219-2229. ISSN 0277-9536

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Abstract

Decision making behaviour has often been shown to vary following changes in the way in which choice problems are described (or ‘framed’). Moreover, a number of researchers have demonstrated that the standard gamble is prone to internal inconsistency, and loss aversion has been proposed as an explanation for this observed bias. This study attempts to alter the influence of loss aversion by framing the treatment arm of the standard gamble in terms of success (where we may expect the influence of loss aversion to be relatively weak) and in terms of failure (where we may expect the influence of loss aversion to be relatively strong). The objectives of the study are (1) to test whether standard gamble values vary when structurally identical gambles are differentially framed, and (2) to test whether the standard gamble is equally prone to internal inconsistency across the two frames. The results show that compared to framing in terms of treatment success, significantly higher values were inferred when the gamble was framed in terms of treatment failure. However, there was no difference in the quite marked levels of internal inconsistency observed in both frames. It is possible that the essential construct of the standard gamble induces substantial and/or widespread loss aversion irrespective of the way in which the gamble is framed, which offers a fundamental challenge to the usefulness of this value elicitation instrument. It is therefore recommended that further tests are undertaken on more sophisticated corrective procedures designed to limit the influence of loss aversion.

Item Type: Article
Official URL: http://www.elsevier.com/locate/socscimed
Additional Information: Published 2004 © Elsevier. LSE has developed LSE Research Online so that users may access research output of the School. Copyright © and Moral Rights for the papers on this site are retained by the individual authors and/or other copyright owners. Users may download and/or print one copy of any article(s) in LSE Research Online to facilitate their private study or for non-commercial research. You may not engage in further distribution of the material or use it for any profit-making activities or any commercial gain. You may freely distribute the URL (http://eprints.lse.ac.uk) of the LSE Research Online website.
Library of Congress subject classification: H Social Sciences > H Social Sciences (General)
H Social Sciences > HM Sociology
Sets: Research centres and groups > LSE Health and Social Care
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 30 Jun 2006
URL: http://eprints.lse.ac.uk/158/

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