Gain and Loss Framing

47866

“An evil gain equals a loss.” — Syrus

Should you focus on the positive benefits?

Or, should you focus on the cost or risk or loss of not doing something?

If you want to be more persuasive, you need to know when to focus on gains and when to focus on losses.

A gain-frame is when you frame a message focused on the positive outcome. A loss-frame is when you focus on the costs or the loss, such as opportunity cost.

The key thing to keep in mind is that we do more to avoid pain, than to seek gain, and that we prefer more certain outcomes than uncertain alternatives.

Gain and Loss Framing

Prospect Theory helps us understand how we look at gains and losses.

According to Prospect Theory, individuals are more sensitive to minor losses than to minor gains.

In other words, we do more to get out of pain, then we do for gain.

To elaborate, people react differently to messages and facts depending on how they are framed. A message can emphasize benefits (gain-framed), or it can emphasize costs (loss-framed.)

Gain-Framed Message: You will live longer if you quit smoking.
Loss-Framed Message: You will die sooner if you do not quit smoking.

If a behavior leads to a relatively certain outcome, then gain-framed messages can work well.

If a behavior leads to a more uncertain outcome, then loss-framed messages are more effective.

Gain and Loss Framing Example

Because the outcome is clear, you would focus on the benefits of using sun screen. A gain-framed message would be “Prevent skin cancer by using sun screen.”

In contrast, because the outcome is not clear of screening mammographies, you would use a loss-framed message. The behavior is risky and the outcome is uncertain, since breast cancer may or may not be detected.

Save Lives or Reduce Deaths?

Would you choose to save 200 lives? What if it meant losing 400 lives?

In a classic example, psychologists Amos Tversky and Daniel Kahneman tested how participants would react based on different phrasing for a hypothetical life and death scenario.

If participants were told a positive frame, “Saves 200 lives”, they chose Treatment A over Treatment B, 72% of the time.

If participants were told a negative frame “400 people will die”, they chose Treatment A only 22% of the time.

Framing	Treatment A	Treatment B
Positive	“Saves 200 lives”	“A 33% chance of saving all 600 people, 66% possibility of saving no one.”
Negative	“400 people will die”	“A 33% chance that no people will die, 66% probability that all 600 will die.”

The Certainty Effect

A related concept to be aware of is the Certainty Effect. Here is a quick summary of the Certainty Effect according to Psychlopedia:

“Although a focus on gains and losses generates different preferences, some inclinations of individuals are manifested in both scenarios. For instance, as Kahneman and Tversky (1979) showed, individuals tend to prefer certain to uncertain alternatives in general–a tendency called the certainty effect. “

Key Take Aways

Here are my key take aways on gain-and loss-framing::

Gain-and loss-framed messages are differently persuasive.
If a behavior leads to a relatively certain outcome, then gain-framed messages work well.
If a behavior leads to a more uncertain outcome, then loss-framed messages are more effective.
Gain-framed messages can be more persuasive than loss-framed messages when the outcome is clear and obvious.
We’re more sensitive to minor losses than to minor gains.
When we experience intense feelings, either positive or negative, the effect of loss framing on risk-taking diminishes.
When we experience positive feelings, the effect of gain framing on risk aversion also subsides.
In general, we prefer certain alternatives to uncertain alternatives.