Framing effect refers to the phenomenon that people react differently to the same piece of information, due to how the information is presented – in terms of loss, or in terms of gain. An example in poker would be: Suppose a player is considering investing 5k into a 5k pot. He could be thinking ‘If I invest, I could earn 5k’ (positive frame), or ‘If I invest, I could lose 5k’ (negative frame). Research has found that people tend to avoid risk when a positive frame is presented (‘I may win 5k, but this is risky, and I don’t want to take the risk’), but seek risks when a negative frame is presented (‘I may lose 5k, although it’s risky, I want to take the risk’).
I can see how this affects decision making for someone who is unclear about his goals. Now my question is: if someone is clear about his goals (e.g., a good poker player), could framing still affect him?
A good poker player is required to prioritize his goals in almost every single minute – Is this a tournament that I want to ‘win big or go home’, or just cash? Is this a stage that I need to accumulate more chips, or just sit and watch the endangered players being eliminated? Is it more important for me to win this pot, or I can’t afford to lose more chips? Once he understands his priorities, he will know which one is more important – gain or loss – and make decisions accordingly.
Better still, if a player is really that good, he can totally use the framing effect to his advantage – if he wants to encourage himself to take more risks, he could think in terms of negative frames; and when he wants to remind himself to avoid risk, he resorts to positive frames.