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Objective numeracy exacerbates framing effects from decision-making under political risk
Erin B Fitz1, Dominik A Stecuła2, Matthew P Hitt3
1Department of Political Science, Colorado State University, Fort Collins, USA. erin.fitz@colostate.edu.
Scientific Reports
|May 7, 2024
Summary
Prospect Theory decision-making is influenced by individual numeracy and cognitive engagement. Even informed individuals can be swayed by policy framing, especially concerning potential losses.
Area of Science:
- Behavioral Economics
- Decision Science
- Political Psychology
Background:
- Prospect Theory explains decision-making under risk but often uses hypothetical scenarios.
- Real-world decision-making is affected by cognitive abilities and motivation, which are often overlooked.
Purpose of the Study:
- To test Prospect Theory using a real-world event: the US debt ceiling negotiations.
- To examine how objective numeracy and need for cognition moderate framing effects in decision-making.
Main Methods:
- An original survey of 2813 US adults was conducted.
- Statistical models were used to analyze Prospect Theory effects, numeracy, and need for cognition.
Main Results:
- Respondents were generally risk-averse to gains and risk-accepting to losses.
- Higher numeracy correlated with increased risk aversion for gains and risk acceptance for losses.
- Need for cognition interacted with numeracy to influence risk-taking, particularly for potential losses.
Conclusions:
- Objective numeracy and need for cognition significantly moderate framing effects in decision-making.
- Individuals with high cognitive abilities can still be influenced by policy frames, especially regarding losses.
- Findings highlight the complex interplay of cognitive factors in political decision-making.
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