How 'free' is free choice?

Last week I had to consult a dentist on toothache, and I was told that I could have a dental filling immediately, in an attempt to save the tooth on the day of the consultation or wait to get free tratement through the health service in a few weeks. I was told that ' in these cases, there is a small chance that the tooth will be saved. It is not granted that a filling will save the tooth'. I had a very expensive filling thinking whether or not I was panicked into getting it there and then. What would have happened if say, the dentist had told me 'in these cases there is a big chance that the tooth will die. It is not granted that a filling will save the tooth'. Would I have had the filling right away, which would mean more cost as it would be private dental treatment? Or I would have waited a couple of weeks to get free treatment? This made me think of how we chose between alternative options in terms of cognitive theories presented in class.

Well, how do we chose between alternatives offered (even implicitely) to us? The following video sheds some light in our sometimes irrational decisions.

The so called 'framing effect' is observed when different options are described in terms of gains (positive frame, i.e. small chance to save the tooth) rather than losses (big chance for tooth to die-negative frame). A classic experimental demonstration of this effect was Kehneman and Tversky's (1981) 'Asian disease problem' in which participants were asked to chose between a certain and a risky option to save lives of reduce deaths from a disease. The problem was posed as follows:

Positive frame:
If Program A is adopted, exactly 200 people will be saved.
If Program B is adopted, there is a 1 in 3 probability that all 600 people will be saved
and a 2 in 3 probability that no people will be saved.
Negative frame:
If Program C is adopted, exactly 400 people will die.
If Program D is adopted, there is a 1 in 3 probability that nobody will die and a 2 in 3
probability that all 600 will die. (adapted from Gonzalez, Dana, Koshino & Just, 2004, p.2)

It was found that most people chose A over B and D over C, even though they are contradictory. Indeed, A is equivalent to C and D to B. (Kahneman & Tversky, 1981). But why do people reach such seemingly irrational decisions? In other words, why did I just have an expensive filling on a tooth that is probably gone already?

Research has shown that changes in the ways in which information is presented can have large effects on peoples choices. Prospect theory (Kahneman & Tversky, 1979), explains such fraiming effects in terms of losses and gains. An outcome is described (and perceived) either as a gain or a loss relative to a reference point, i.e. the status quo (weighting function). Moreover Prospect theory asserts that people are more sensitive to losses than gains, i.e. a potential loss is more catastrophic than an equal gain would is gratifying. Thus, people tend to avoid risk when a positive frame (gain) is presented (e.g. I ll have dental treatment immediately) and seek risk when a negative frame (loss) is presented (e.g. I will hold off and have dental treatment later). Other studies have shown that people asked to chose between radiation therapy and surgery for cancer prefer the surgery otpion if it is described in terms of entailing possibility to survive cancerrather than possibility to die from the disease ( McNeil, Pauker, Sox, Tversky, 1982).

The fact that people's decisions are affected by the ways in which information is presented raises some interesting and in some cases thorny questions. For instance in the case of medical setings, should doctors try to manipulate patients' attitude towards their own health, eliciting decisions that are more appropriate to particular cases or should information be presented in an objective way (i.e. both positive and negative frames could be presented). Should/could political opinions be framed so that voters vote for certain alternatives? How far reaching are framing effects in financial settings and how can they affect borrowing, lending or investing? Choosing appropriate frames, moves from psychology to ethics, and it seems that such issues need to be addressed both as scientific but also as ethical and philosophical.

Gonzales, C., Dana, J., Koshino, H., Just, M. (2004). The framing effects and risky decisions: Examining cognitive functions with fMRI. Journal of Economic Psychology, 26 (2005) 1–20

Kahneman,D.,& Tversky,A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2),263–291.

McNeil BJ, Pauker SG, Sox HC, Tversky A. (1982). On the elicitation of preferences for alternative therapies. New England Journal of Medicine, 306: 1259–62.

Tversky,A., & Kahneman,D. (1981). The framing of decisions and the psychology of choice. Science, 211, 453–458.