Effect of Framing - A Cognitive Bias
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Authors
Poduri, Sri Lalith Bharadwaj
Issue Date
2019-03-29
Type
Other
Language
en_US
Keywords
Choice overload , Cognitive bias , Finance , Framing
Alternative Title
Abstract
Traditional or Classical Finance suggests that people make decisions considering various factors depending on context in which he is taking the decision, Is he taking decision based on intuition or having sound knowledge, does he have any other options to consider etc. These types of factors influence any decision makers behavior. The question I framed is based on following behavioral concepts: 1)Framing 2)Choice Overload. Framing states that investors do not behave as predicted and the behavior of any investor depends on the frame of reference or context in which decision is made. Behavioral finance impacts rational decision making of an investor. "Choice overload" also known as "Over choices". It is the phenomenon of choice overload and occurs as a result of too many choices being available to decision makers. Choice overload may refer to either choice attributes or alternatives.