When the research team presented alternatives in terms of a chance for losses, the board chose the risk-seeking alternative, but when the team presented the alternatives in terms of opportunities for gain in the following meeting, the board switched to the risk-averse alternative. The board had succumbed to the _____ bias.
A) framing
B) discounting
C) status quo
D) confirmation

Question

Quizplus · Accepted Answer

This scenario describes the framing effect, where the board's decision was influenced by the way the alternatives were presented. When presented as a chance for losses, they were risk-seeking, but when presented as opportunities for gain, they became risk-averse. Discounting refers to reducing the value of future gains or losses, status quo bias refers to a preference for maintaining the current situation, and confirmation bias refers to seeking out information that confirms preexisting beliefs. None of these biases are evident in this scenario.

When the Research Team Presented Alternatives in Terms of a Chance