By Christopher Krupenye
The Conversation
Feb 12, 2015

Apes Make Irrational Economic Decisions – That Includes You

Just the other day I found myself in the waiting room of an automotive dealership. While my car was being serviced, I flipped through a product brochure. One ad for an oil change boasted that it would clean out at least 90% of used oil. Another for new brakes guaranteed maximum performance for twelve months. No one was advertising oil changes that leave behind 10% sludge, or brakes that begin to fail after only a year.

That’s because advertisers know that people are sensitive to how options are framed. We appraise goods more highly when their positive attributes are emphasized over their negative attributes, even if the details describe essentially the same situation (e.g., 90% clean versus 10% dirty).

This is called attribute framing, and it’s just one example of many irrational biases that humans exhibit when making economic decisions. More…