The Framing of Decisions and the Psychology of Choice

Explanations and predictions of people’s choices, in everyday life as well as in the social sciences, are often founded on the assumption of human rationality. The definition of rationality has been much debated, but there is general agreement that rational choices should satisfy some elementary requirements of consistency and coherence. In this chapter, we describe decision problems in which people systematically violate the requirements of consistency and coherence, and we trace these violations to the psychological principles that govern the perception of decision problems and the evaluation of options.