THE R E
"
'
V
F
H
M
A
D
T
R
E AN C E O KA NE AN N
V E S KY S
C ON C E P T O F FRAM IN
Ma
D e c e mbe r
,
1 983
"
"H
TO
.
"
O R AN IZAT ION
BE HAV IO R 1
Ba z er m an
WP #
1 5 1 0- 83
J ou rnal o f Mana g ement
TH E
RE
,
in
Pr e s s
"
E A
V N C E O F K AH NE MAN AND TV E R S KY ' S
C O NC E P T O F FRAMI N
"
1
T O ORG A NI ZATI O N BEHAV I OR
Max H
.
Ba z erman
Ma s s a chu s e t t s In s t i t ut e of Te chno l o gy
1
Thi s r e s ea rch wa s fund e d b y Na t i ona l S c i e nc e Founda t i on Gr an t
EN S- 8 1 0 7 3 3 1
The au t ho r b ene f i t t e d fr om nume r ou s ins i ght fu l c o mm e n t s f r om E d
C onl on Ter ry Co nn e l l y Ka thy K ram John Ma r t in Ph i l Mi r v i s , and two
anonymous re vi ewe r s
Co r re s pond en ce s houl d be s e nt t o Max H Ba z e rma n
Ma s s a chu s e t t s In s t i tu te o f Te chno l o gy S l oan S cho o l o f Mana g eme n t 5 0 Memori a l
D ri ve Camb r i d g e MA 0 2 1 3 9
.
.
,
,
,
,
.
.
,
,
,
,
.
,
,
'
The Re l evanc e o f Kahn eman and Tve r sk y s Conc e pt o f
Fra min g t o Or g ani za t i ona l Behavi or
Ab s t ra c t
Re c ent r e s e a r ch by Kahneman and Tve r sky ( 1 9 7 9 ) ha s demons t ra t e d tha t
i nd ivi dua l de c i s i ons a re s y s t ema t i ca l ly af fe ct e d b y the way i n whi ch pr ob l ems
a r e pre s en t e d
.
Sp e c i fi ca l ly , ind ivi dua l s t end t o be r i sk ave r s e t o pr ob l ems
frame d i n the p os i t ive d i re c t i on
c onc e rn ing gains ) and t o b e r i sk
s e ek ing t o pr ob l ems fr ame d i n the ne ga t i ve d i r e c t i on
l os s e s )
conce rn i ng
Thi s pa p er ( 1 ) demon s t ra t e s tha t thi s c onc e p t o f fr aming ha s wi de
.
explana t o ry p owe r conce rni ng a va r i e t y o f conce p t s i n o r gan i za t i ona l behavi or
and ( 2 ) a rg ue s tha t the framing o f e xpe r i ment a l ma t e r i a l s a f fe c t s the
fo rma t i on o f pa ra di gms in o rgan i za t i ona l behavi o r
"
a c cep t e d
f ind ing s
"
.
It
i s a rgue d tha t ma ny
ma y e xi s t more b e caus e o f t he way re s e arche r s frame the
prob l em than b e caus e o f t he pre sume d impa c t o f t he con s t r uc t on indi vi dua l
b ehavi or
.
S p e c i f i c ap pl i ca t i on i s pro vi de d t o the a re a s o f ( 1 ) the e s c a la t i on
o f c ommi tment
,
(2 )
ne go t i a t o r behavi or and ( 3 )
"
"
the r i sky shi f t
.
'
The Re l evanc e o f Kahneman and Ty e r sky s Conc e pt o f
Framin g t o Or g ani z a t i ona l Behavi o r
Tra di t i ona l mode l s and the or i e s in org ani za t i ona l b ehavi or have de a l t wi th
h ow i nd i vi dua l s re s pond t o va r i ou s s i tua t i on s
.
Ra re ly have we c on ce rne d
our s e l ve s , howeve r , wi th the wa y s i tua t i ons a re fra me d t o the t arg e t
i ndivi dua l o r gr o up
.
Cons i de r the f o l l owi ng pr ob l em cont e x t ( mo di fi e d f rom
Ka hneman and Tve r sky
A l a rg e car manuf a c t ure r ha s re cent ly b e en hi t wi th a number o f
e conomi c di f f i cu l t i e s and i t appear s a s i f thre e p l ant s ne e d t o b e
c l o s e d and 6 000 emp l oye e s l a i d o f f
The vi ce - pr e s i den t o f pr o du c t i on
ha s be en expl o r i ng a l t e rna t i ve way s t o avo i d thi s c r i s i s
She has
d eve l o p ed two p lans "
.
.
P l an A " Thi s p lan wi l l s ave 1 o f the 3 pl ant s and 2 0 00 j ob s
Pl an B " Th i s p l an ha s a
a l l 6 00 0 j ob s , b u t ha s a
j ob s
.
pr obab i l i t y o f s avi ng a l l 3 pl ant s and
pr o bab i l i t y o f s aving n o p lant s and n o
.
Whi ch p lan woul d you s e l e c t
"
Or g an i za t i ona l b ehavi or has g iven u s a number o f i s su e s t o c ons i de r
wi l l be the impa c t o f e a ch a c t i on on the un i on
"Wha t
.
Wha t
wi l l be the impac t o f
e ach pl an on the mo t iva t i on and mo ra l e of r e t a ine d empl oye e s
"How
do t he
va lue s o f the vi c e - pre s i dent o f produ c t i on d i ff e r fr om tho s e of the l a rge r
c orp ora t i on
"Whi l e
a l l o f the s e q ue s t i ons a re i mp or t an t and have b e en
a dd re s s e d i n the o rgan i za t i ona l
b ehavi o r
l i t e ra tu r e , a mo r e fundament a l
q ue s t i on und er l i e s the s ub j e c t ive s i tua t i on and the r e su l t ing de ci s i on
.
Re cons i d e r th e ab ove pr o b l em , r ep la c i ng the cho i ce s provi de d above wi th t he
f o l l owi ng cho i c e s "
P l an C " Thi s p lan wi l l r e s ul t in the l o s s o f 2 of the 3 plant s and
4 00 0 j ob s
.
P l an D " Thi s plan has a
pro babi l i t y o f re s u l t ing in the l o s s o f
a l l 3 pl ant s and a l l 6 0 0 0 j ob s , bu t ha s a
probab i l i t y of l o s i ng
n o pl ant s and no j obs
.
Whi ch p lan wou l d you s e l e c t
"
Cl o s e e xamina t i on o f the two s e t s o f a l t e rna t i ve p lan s find s them t o be
o b j e c t i ve l y the s ame
"
Howeve r , mo s t ( BO Z ) i nd ivi dua l s cho o s e Pl an A
.
( o b j e c t i ve l y t he s ame a s Pl an
i nd ivi dua l s cho o s e Pl an
( Ba z e rma n ,
D
C)
in the fi r s t s e t , wh i l e mo s t
( o b j e c t ive ly the s ame a s Pl an B ) in the s e cond s e t
Changi ng t he de s c ri p t i on o f t he out c ome s t a t e s f r om j ob a nd
p lan t s s ave d ( ga ins ) t o j ob s and p lant s l os t ( l o s s e s ) wa s s uf f i c i en t t o shi ft
pro t o t ypi c cho i ce f rom r i sk ave r s e ( t ak e the s u re thi ng ) t o r i sk s e ek i ng
d o ( a g gre ga t e d ) i ndi vi dua l s demons t ra t e thi s ap pare nt c on t ra di c t i on
Why
.
"The
the o ry tha t e xp la ins th i s pa t t e rn o f cho i c e unde r l i e s our examina t i on of the
impa c t o f
"
framing
"
on the f i e l d o f org ani za t i ona l b ehavi or
.
Thi s shi f t i n pro t o t yp i ca l cho i ce i s i ncon s i s t ent wi th e xpe c t e d ut i l i t y
the ory ( von Ne umann
Mo r gan s t e r n ,
1 947 ;
Ho l l oway ,
wi th a g rowi ng b ody o f l i t e ra tu r e ( Kahneman
Ka hn eman , 1 9 8 1
;
Tha l e r
,
1 98 0 )
but i s c ons i s t en t
Tve r sky , 1 9 7 9
s avi ng j ob s and p lant s
d i f f ere nt ly fr om r i sk s c onc e rning p er c e i ve d l o s s e s
s e e pl ans C
D)
.
1 982 ;
Tve r sky
whi ch shows tha t ind ivi dua l s t r e a t r i sk s
conce rni ng p e r c e ive d ga in s
pl ant s
,
In
s e e p l ans A
B)
l o s ing j ob s and
an a t t emp t t o e xp la in the s e c ommon and
s y s t ema t i c devi a t i ons fr om ra t i ona l i t y , Ka hneman and Tve r sky ( 1 9 7 9 ) de ve l op ed
"
Pr o s pe c t The o r y
"
.
Thi s the o ry s ug ge s t s ( 1 ) r ewa rd s and l o s s e s a re eva lua t e d
re la t ive t o a n eu tra l r e f e re nce p oi nt , ( 2 ) p o t ent ia l ou t come s a re e xpr e s s e d a s
ga ins
j ob s and pl ant s l o s t )
j ob s and p lant s s ave d ) or l o s s e s
re l a t i ve t o thi s f ixe d , neu t ra l re f ere nc e p oint and ( 3 ) the r e su l tan t chang e
in the a s s e t p o s i t i on i s as s e s s e d by an
S " shape d
va lue func t i on ( s e e Fi gu r e
Whi l e the re a re a numbe r of a ddi t i ona l t ene t s o f pr o s p e c t the o ry
the re sp ons e t o l o s s e s i s mo r e e x t r eme than the re sp ons e t o ga in s )
l imi t our a t t ent i on t o the i s sue s i dent i f i e d above
.
,
we wi l l
As
demon s t ra t e d in Fi gur e l , de c i s i on s mad e t e nd t o avo i d r i sk wi t h
re ga rd s t o gains and s e ek r i sk wi th r e gard s t o l o s s e s
For e xampl e , thi s
.
curve s ugge s t s tha t mo s t indi vidua l s wou l d choo s e a
ove r a 5 0 % chanc e o f g e t t in g a
ga in fo r s u re
gain , s inc e t he va lue p la ce d on
i s no t twi ce a s gre a t a s the va lue pl a ce d on
In
a ddi t i on , t hi s curve sugge s t s tha t mo s t ind ivi dua l s woul d cho o s e a 5 0 % chanc e
of a
l os s o ve r a s u re l o s s o f
p l a ce d on
i s 22
"
"
twi c e a s gr e a t a s the n e ga t ive va lue p la ce d on
Thi s pa r t o f Tve r sky and
c la s s i cal u t i l i t y the ory
.
s i nce the ne ga t i ve val ue
The y a dd
,
K a h n ema n
'
s
l og i c i s cons i s t en t wi th
howeve r , tha t the way the pr ob lem i s
frame d , o r p re s e nt e d , can drama t i ca l l y change the pe rc e i ve d neu t ra l p o i nt of
the que s t i on
.
Thu s , i n the a b ove e xamp l e , i f the pr o bl em i s frame d in t e rms
o f l o s i ng j ob s and pl an t s , the cur r en t po s i t i on i s neu t ra l , the cho i ce s a r e
e va lua t e d on the l o s s par t o f the curve and r i sk s e ek ing b ehavi or r e sul t s
Tha t i s
,
.
i f we think in t e rms o f l o s i n g j ob s , the ne ga t ive va lue pl a ce d on t he
l os s o f 3 p lan t s and 6 0 00 j obs i s vi ewe d ( by mo s t i ndi vi dua l s ) a s no t b e ing
th re e t ime s a s ne ga t ive a s l os ing 1 p lant and 2 0 0 0 j ob s ( s e e F i gure
H oweve r
,
i f the pr o b l em i s fr ame d i n t e rm s of s avi ng j obs and pl an t s
,
the
po t ent ia l d i s a s t e r ( l os i ng e ve ry thi ng ) b e c ome s t he neu t ra l p o i nt , the cho i ce s
a re eva l ua t e d on the ga i n pa r t of the c urve and r i sk ave r s e b ehavi or re s u l t s
.
Wi thi n thi s a l t e rna t ive frame , Fi gu re l c la r i fi e s tha t the ga in pl a ce d on
s avi ng 3 pl an t s and 6 00 0 j obs i s vi ewe d ( by mos t i nd ivi dua l s ) a s no t b e ing
t hre e t ime s a s grea t a s s avi ng 1 p lan t and 2 00 0 j ob s
.
The ke y p o i nt i s tha t
Kahneman and Tve r sky ( 1 9 7 9 ) i dent i fi e d a s y s t ema t i c pa t t ern o f how the framing
o f t he pr ob l em wi l l a f fe c t t he s ub s e q uen t de c i s i on
.
Thi s pap er de l inea t e s the p ower o f Kahneman and
Tve r sk y
'
s
the ory of
de c i s i on b ehavi o r f o r e xpla ini ng c on s t ru ct s wi thi n the doma in of
o r gan i za t i ona l behavi o r
a c ce p t e d
"
f ind ing s
"
.
Spe c i f i ca l l y , i t wi l l b e s ugge s t e d tha t many we l l
ma y e x i s t more b e cau s e o f the wa y re s e arche r s fr amed the
p robl em than b e cau s e o f t he pr e s ume d impa c t of the c on s t ruc t on the behavi or
o f s ub j e c t s
The re ma inde r o f thi s pap er wi l l a t temp t t o s how how thi s one
.
f o rm o f pr ob l em frami ng i d ent i fi e d by Kahneman and Tve r sky ( 1 97 9 ) e xpl a in s
d e ci s i ons a cr o s s thre e c onc e p t ua l domains
.
The fo l l owing thre e s e c t i on s o f the pape r e xami ne the r e l evance o f framing
t o ( l ) the growing l i t era tur e on the e s c al a t i on o f comm i tmen t t o a pr e vi ous
c our s e o f a c t i on ; ( 2 ) c on ce s s i ona ry behavi or by ne go t i a t o rs ; and ( 3 ) the r i sky
shi f t pa ra di gm
.
In e a ch pa r t
,
the l i t e ra ture w i l l b e s e l e c t i ve l y r e vi ewe d
the ins i ght s provi de d by t he con ce p t o f frami ng wi l l be i den t i f i e d
and the
,
i mpor t anc e o f the s e in s i gh t s f or f uture re s ear ch wi l l b e c on s i de re d
,
Fina l l y ,
.
a conc ludi ng s e c t i on int e gra t e s the d i s cus s i on o f the ro l e o f frami ng in
org an i z a t i ona l b ehavi or
.
A k e y the me tha t i s d eve l op ed c onc e rns the n e e d t o
cre a t e pa radi gms tha t s epa ra t e t he impa c t o f ( l ) t he re s ea rcher s s ugge s t e d
ob j e c t ive inde p end ent va r i ab l e s t a t e and ( 2 ) the wa y t he pr o b l em i s frame d t o
the s ub j e c t
.
E sc a l a t i on o f Commi tment
Y ou
f i rm
.
have p er s ona l l y de ci de d t o hi r e a n ew mi ddl e l eve l mana ge r i n your
Whi l e you e xpe c t e d e xc e l l ent pe rf o rmanc e , the ea r ly i nf o rma t i on
s ug ge s t s tha t she i s n o t p erf orming a s e xpe c t e d
.
Shou l d you f i re he r
'
Perhaps you r e a l ly ca n t a f fo rd he r cur r en t l e ve l o f pe rf o rmanc e
o the r hand , you have inve s t e d a fa i r amoun t in he r deve l opmen t
she may j us t b e in t he pr o ce s s o f l ea rn ing the r ope s
.
.
.
"
On the
Furt he rm ore
S o you de c i de t o inve s t
i n he r a b i t l ong e r and pr ovi de a ddi t i ona l re s ourc e s s o tha t she can s uc ce e d
Aga in she doe s no t pe rfo rm a s e xp e ct e d
y our l os s e s ,
"
.
,
Al though you have mo re re a s on t o
you now have eve n more inve s t e d i n thi s e mpl oye e
.
.
"
cu t
Thi s pa t t ern
goe s on f o r the ne x t two yea r s
When d o you g ive up on your
.
Al l o f u s have s p ent t oo mu ch t ime i n thi s k i nd o f t ra p
S taw and hi s a s s o c ia t e s ( c f
1 980 ;
Br o ck n e r
.
,
,
inve s tme n t
"
"
.
among o the r s ( Te ge r ,
S t aw , 1 9 7 6 ,
and Ru b in , 1 9 8 4 ; Ba z e rman
"
B eek un
and S ch o o rm an , 1 9 8 2 ; Co nl on
have demon s t ra t e d tha t de c i s i on - mak e r s who c ommi t thems e lve s
and Wo l f ,
t o a pa rt i cul a r c our s e o f a c t i on ma y c ommi t a dde d re s ourc e s in a non- O p t ima l
way i n o rde r t o j u s t i fy the previ ou s c ommi tment
.
Thi s j u s t i fi ca t i on pro ce s s
has s e ri ous imp l i ca t i ons f or f inanc i a l , manag er i a l and p o l i t i ca l de c i s i ons
.
Thi s s e c t i on o f the pape r s eek s t o the o re t i ca l l y demon s t ra t e the impo rt ance of
pr o bl em framing on the t end enc y t o e s ca la t e pr e vi ou s c ommi tment
.
The expe r imenta l demon s t ra t i on o f the t ende ncy t o e s ca la t e commi tme nt ha s
t yp i ca l ly invo lve d the s imu la t i on o f a de c i s i on pr o ce s s
An
S t aw ,
expe r imen t a l gr ou p i s a ske d t o make a cho i ce b e twe en two inve s tmen t
op t i ons
.
The s imula t i on c on t inue s by inf ormi ng the pa r t i c i pant s tha t s e ve ra l
year s la t e r t he i r inve s t men t ha s n o t b e en s uc ce s s fu l bu t tha t the y have the
op t i on o f inve s t ing more money i n the vent ure
.
A cont r o l gr o up i s t o l d o f a
de c i s i on ma de by ano the r i ndi vi dua l whi ch ha s no t be en s u c ce s s ful and i s a l s o
g ive n the op t i on o f inve s t in g more money i n the ve nt ur e
.
S taw ( 1 9 7 6 ) r e p ort e d
tha t wi th gr oup s o f bus ine s s s choo l s tud ent s pl ayi ng the r o l e o f a financ i a l
vi ce pre s i den t m ak ing inve s tmen t de ci s i on s i n R
D pr o gr ams , the e xp e ri ment a l
gr oup cons i s t en t l y a l l o ca t e d mo re money t o the pre vi ous l y cho s en ventu r e than
d id the c ont ro l gr o up
r e s ea r cher s
.
A cr i t i ca l c onc lus i on ma de by mos t e s ca l a t i on
Ba z e rma n , Gi ul iano and
A ppe lman ,
in p re s s ) i s tha t t he
t endenc y t o e s c a la t e re pr e s ent s a devi a t i on fr om op t ima l de c i s i on mak i ng
In c ont ra s t t o the conc lu s i on tha t de c i s i on - mak e r s a r e a c t i ng
i r ra t i ona l l y , the framewo rk ou t l ined i n F i gure 1 pr o vi de s an a l t e rna t ive
.
pre s en t e d i n t e rms o f
"
you s t i l l have
( ga in par t o f curve , p os i t ive frame )
( l os s pa r t o f curve , ne ga t i ve frame )
,
.
"mi l l i on
o f r e s ea rch fund s ava i lab l e
"
ra the r than
you have l o s t
Y
mi l l i on
"
"
Thi s a l t e rna t ive f rami ng i s l ike ly t o
re s ul t i n a shi ft fr om r i sk s e eki ng b ehavi or ( a dd ing more t o the inve s tmen t )
t o r i sk ave r s e behavi o r ( a c ce pt i ng the s ur e l os s )
Th e
ab ove ana ly s i s d i s c us s e s framing fr om the p er s p e c t ive o f how the
i nf o rma t i on i s pre s ent e d t o t he de c i s i on- m ak e r
r e co gn i z e
pa t t e r n
.
,
The behavi o ra l s c i ence s
.
howeve r , tha t ind i vi dua l s r e i nt e rpr e t inf orma t i on
,
.
Fo l l owing thi s
d e c i s i on- m ake r s a r e l ik e l y t o have va ryi ng t end enc i e s in t e rms o f t he
fr ame the y t yp i ca l ly a dop t
Thu s
.
,
the c ombina t i on o f inf orma t i on f orma t
‘
pre s ent e d and the i ndi vi dua l s frami ng t endenc i e s wi l l a f f e c t r i sk a t t i t ude s
and s ub s equen t e s c ala t i on b ehavi or o f mana g er s , p o l i t i c ian s and a ca demi c i ans
.
In s umma ry , th e e s ca l a t i on pa rad i gm i s an impo r tant new di r e c t i on i n
d e ci s i on mak i ng re s ea rch
The curr ent the ory s ugge s t s an a l t e rna t ive vi ew o f
.
t he e xi s t ing da t a on e s ca la t i on , and s ug ge s t s tha t we ne e d t o s e pa ra t e the
i mpac t o f ( 1 ) the ob j e ct ive s t a t e i n the e s c al a t i on para di gm fr om ( 2 ) the
f rame us e d t o i nf lu en ce the s ub j e c t
"
e xp er i ment ( Kne e - De e p i n the B i g
Re ca l l i ng S taw s ( 1 9 7 6 ) c la s s i c
'
.
we q ue s t i on whe the r the
e s ca la t i on e f fe c t wou l d be ob s e rve d i f the s t udy e xamine d t he pr ob l em from the
fr ame o f
"
havi ng 7 5 % o f y our b ody ou t o f the mud
"
.
Ne g o t i a t i on
Ove r the pa s t 2 0 ye a rs
,
ne go t i a t i on re s ea rch ha s b e en domina t e d
by
two
s e t s of f o r ce s , c ol l e c t ive ba rga ini ng r e s ea r ch in l abo r re la t i ons and s o c ia l
p s y cho l ogy
.
"
nf ort una t e ly
,
thi s l i t e ra t ure ha s fa i l e d t o cons i de r the pr o ce s s
o f de c i s i on maki ng unde r compe t i t ive cond i t i on s
.
Th i s s e c t i on s e ek s t o show
t ha t s u ch a p er s p e ct ive i s a cr i t i ca l new d i re ct i on f or n e go t i a t i on
r e s e a ch
,
'
and tha t the s pe c i fi c e f fe c t s o f t he ne go t ia t o r s frame ha s impre s s i ve
p ot ent ia l f or c lari fying pa ra doxe s wi thi n the n eg ot i a t i on s e t t ing
.
Fa rbe r and Ka t z ( 1 9 7 9 ) have r e cent l y i d ent i f i e d the i mpo r t ance of r i sk
a t t i tude s o f n e go t i a t o r s und e r c ond i t i ons o f b ind ing a rb i tr a t i on
.
In b inding
a r bi t ra t i on , b o th s i de s a gr e e , o r a r e l e ga l l y compe l l e d , t o have a thi rd pa r t y
i mpos e a re s ol u t i on i f the two s i de s fa i l t o re a ch a re s ol u t i on on the i r own
Ar bi t ra t i on
.
ha s the b ene f i t s o f r ep la c ing the ha rmfu l e f fe c t s o f a s t rik e ,
whi l e enc oura g ing the pa r t i e s t o a gr e e i n ord e r t o avo i d the unc e rt a int y
a s s o c ia t e d wi th the b i nd ing de c i s i on o f a t hi rd pa r ty
.
Ar b i t ra t i on ha s be come
an i nc re a s ing ly common f orm o f d i s p ut e r e s o lu t i on , b o th i n the pub l i c and
p r ivat e s e c t or s ( K o cha n
,
Far b er and Ka t z ( 1 9 7 9 ) s ugge s t tha t i f b o th pa r t i e s are r i sk ave r s e
ra the r than impo s e arb i t r a t i on ( a r i sk i e r op t i on
.
then
t ak e the s ure thi ng )
n e go t ia t or s shoul d re a ch a ne go t ia t e d s e t t l ement
ag gre ga t e d e xpe c t e d va lu e )
,
,
wi thout in cr e a s i ng the
A r e s o lu t i on i s a l s o pr e d i c t e d i f one pa rt y i s
s uf f i ci ent ly r i sk ave r s e s u ch tha t the y ar e wi l l i ng t o pay the pr e mium
re qu i re d by the more r i sk s e ek i ng pa r t y t o fo r e go the unce r t a int y inhe re nt i n
arb i t ra t i on
wi l l
be
.
Conve r s e l y , i f b o th par t i e s are r i sk s eeki ng
invok e d
.
,
the n a r b i tra t i on
T o s umma r i z e , i n or de r fo r ar bi t ra t i on t o be no rma t ive l y
i nvok e d , a r i sk s e ek ing pr e f ere nc e mus t ag gr e ga t e l y e xi s t b e twe e n the two
pa r t i e s
.
In addi t i on , i t i s wi de ly a c ce p t e d i n the de c i s ion the o ry l i t e ra tu re
tha t i nd ivi dua l s and org ani za t i ons t end t o b e r i sk ave r s e ( H o l l oway ,
u t i l i za t i on o f ar b i t ra t or s
"I t
i s a rgue d be l ow tha t the frame of ne go t i a t or s
i s c r i t i ca l in c la r i fy ing thi s pa rad oxi ca l s t a t e
.
Cons i de r a pr o t o typi c lab or - mana gemen t s i tua t i on " The un ion c l a ims the y
n ee d a ra i s e t o $ 1 2 / h o ur , and tha t any thing l e s s woul d re pr e s ent a l os s t o
memb e r s gi ven the cur r en t i nf l a t i ona ry envi r onment
Mana gement , in con t ra s t
.
,
c la ims tha t the y canno t pa y more than $ 1 0 /h our , and tha t any thing more wou l d
im po s e an una cc e p t ab l e l o s s t o the company
.
In our s imp l i fi e d one i s s ue cas e ,
wha t i f e a ch s i d e had the op t i on o f s e t t l ing f or $ l l /h o u r or g o ing t o
ar b i t ra t i on
"S i nc e
e a ch pa r t y i s vi ewi ng the ne go t i a t i on in t e rms o f wha t
the y have t o l os e , f ol l owing Kahneman and
Tve r sk y
‘
s
( 1 97 9 ) ba s i c pr o p os i t i ons ,
e a ch wi l l r e s pond i n a r i sk s e ek ing manne r and arb i t ra t i on i s l ik e l y t o be
cho s en
ga i n
.
"
G ive n the s ame ob j e c t ive s p e c i f i e d a bove , b u t chang ing the s ub e c t ive
/ l o s s s i tua t i on r e s u l t s in a ve ry d i f fe r en t pr e di c t e d ou t come
.
I f the
uni on vi ews any t hi ng ab ove $ 1 0 / h o ur a s a gain and mana gemen t vi ews any thi ng
unde r $ 1 2 / hour a s a ga i n , t hen a po s i t ive frame wi l l e xi s t , r i sk ave r s i on wi l l
t end t o domi na t e and a n e go t i a t e d s e t t l ement wi l l gene ra l l y o c cur
.
The impl i ca t i on o f the a bove framework i s o f c ri t i ca l impo r t an ce
.
B o th
s i de s i n n e go t ia t i ons o f t en t a lk in t e rm s o f why the y ne e d a ce r t a in wa ge
the y ta lk in t e rms o f l o s s e s
s c enar i o pr ovi de s the an swe r
Wha t i f they b e l i eve thems e lve s
.
"The y wi l l
a d e pt
"The
a b ove
a n e ga t i ve frame and e xh i bi t
r i sk s e ek i ng be havi or ( Ba z e rman and Ne a l e , 1 98 3 ; Ba z e rman , in p re s s )
.
Ne al e
and Ba z e rman ( 1 9 8 3 ) f ound t ha t l a b o r / mana gemen t n e go t i a t or s wi th p os i t ive
frame s a r e s i gni f i cant l y mo r e c on ce s s i ona ry and s u c ce s s fu l than the i r
n e ga t ive ly frame d c ount e rp a rt s
Simi la rl y , Ba z e rman ,
.
Ma gl i
oz z i
,
and Ne a l e
( 1 98 3 ) f ound tha t buye r s a nd s e l l e r s who a d op t a po s i t ive frame a re ab l e t o
c ompl e t e t rans a c t i ons more q ui ck l y and a re s i gn i f i cant l y more s u c ce s s f ul th an
tho s e wh o adop t a ne ga t i ve frame
.
A c r i t i ca l
rol e o f me di a t or s and o the r
int ere s t e d thi rd par t i e s shoul d b e t o enc oura ge b o th pa rt i e s t o vi ew the
conf l i c t in a p o s i t ive ( o r a t l e a s t neu t ra l ) frame
framework wa s deve l op e d i n the
.
F ina l ly , wh i l e the above
ll
ch o i ce
.
H i s t or i ca l l y , the twe lve pr obab i l i t i e s we re s umme d , t o g ive a s ing le
s c o r e i n whi ch a l owe r s c or e de s i gna t e d a r i sk i e r cour s e o f a c t i o n
Al though the r i sky shi f t , u s ing the
CDQ
,
.
has b e en r ema rkab l y s t ab l e a cr o s s
a wi de va r i e t y o f e xpe r iment a l s e t t i ng s and t yp e s of expe r ime nt a l s u b j e c t s ,
the shi f t f or the va ri ous i t ems o f the
d i re c t i on and magn i tud e
.
CD Q
d i f fer s ub s t ant i a l l y b o th i n
S ome i t ems cons i s t ent l y pr odu ce r i sky shi f t s , s ome
i t ems pr o duce no s i gn i f i cant shi f t , and two i tems r e gula rl y g ene ra t e c au t i ous
the gr oups a r e l e s s r i sky t han i ndi vi dua l s )
s hi ft s
i t ems s imi lar in f orm t o the
C DQ
In add i t i on , new
.
have b e en c ons t ru c t e d and t e s t e d whi ch
c on s i s t en t l y gene ra t e cau t i ous s hi f t s ( Ca rtwr i ght ,
Ad de d q ue s t i ons c onc e rning the r i sky shi f t para d i gm we re pr ovi de d by
c on t ra d i c t o ry r e s ea r ch in
"
-
r e al l i f e
"
s i t ua t i ons
inve s t or s , j ur i e s ,
"O
c on s umer s ) and l ab ora t o ry re s ea rch tha t d i d no t empl oy the
D
Some t ime s a
.
r i sky s hi f t o c cur re d , s ome t ime s a cau t i ou s s hi f t o c cur re d and s ome t ime s no
s hi f t o c curr e d
.
Ba s e d on s u ch evi d enc e , Ca rt wr i ght ( 1 9 7 3 ) conc lude d tha t
i s now e vi dent tha t the pe r s i s t ent s ea r ch f or an e xplana t i on o f
s hi
"
ft w
as
m i s d i re c t e d
'
"
it
the r i sky
and tha t any a de qua t e the ory wi l l have t o a c count f or a
mu ch mo r e c omp l i ca t e d s e t o f da ta than or i g ina l l y ant i c i pa t e d
"
The ab ove s t a t e d f i xa t i on on l ab ora t o ry s t ud i e s u s ing the
t he mo s t cr i t i ca l q ue s t i on
" When
( pg
CD Q
.
has ob s c ure d
doe s a r i sky ve r s u s cau t i ous shi ft o c cur
T he b l a ck - b ox ap pr o a ch o f u s ing the t o t a l
"
s c ore i s incapab l e o f
C DQ
de l inea t i n g the pr o ce s s e s unde r lyi ng group indu ce d r i sk shi f t s
.
In a uni qu e
a t t emp t t o e xp l a in whe n r i sky ve r s us cau t i ous s hi f t s wi l l pr e di c tab l y b e
i ndu ce d ,
V i n ok u r
( 1 9 7 1 ) s ug ge s t e d tha t i ndi vi dua l s and gr oups wi l l cho o s e tha t
op t i on whi ch ma x imi z e s the i r e xpe c t e d u t i l i t y
.
Whi l e i nt e re s t ing , thi s i de a
f a i l s t o c la r i fy the c ond i t i ons unde r wh i ch the maximi z a t i on o f s ub j e c t ive
e xp e c t e d u t i l i t y wi l l l e ad t o r i sky ve r s us c au t i ous s hi f t s
.
Cl ar i fi ca t i on o f
12
t hi s que s t i on c ome s f rom the frami ng conc ep t
.
As s ugge s t e d ea r l i e r , i n
c ompa ri s on t o max imi z ing e xpe c t e d va lue ( the s t ra i ght l ine in Fi gure
indi vi dua l s wi l l t end t o be r i sk ave r s e i n p os i t i ve l y frame d s i t ua t i on s , whi l e
be ing r i sk s e eki ng in n e ga t ive ly fra me d s i t ua t i ons
.
We mi ght hy po the s i z e ,
howeve r , tha t gr oups enc our age the ve rba l i za t i on o f the prob l em in mu l t i p l e
a l t e rna t ive frame s by va ry ing gr oup membe r s
one spe c i f i c frame
.
thu s d i lu t ing the impa c t o f any
Thi s s ug ge s t s t ha t gro up s wi l l move away from the
c la s s i ca l u t i l i t y curve t owa rd s an e xp e c t e d va lue ( or r i sk n e u tra l ) de c i s i on
s t ra t e gy
.
Exami ni ng Fi gu r e 1
t hi s pe r s p e c t i ve wou l d s ugge s t tha t ( l )
,
j ud gment s ma de by i nd ivi dua l s wi l l t end t o f ol l ow the c la s s i ca l u t i l i t y curve
and ( 2 ) gr oup de c i s i on s wi l l t end t o a d j u s t t owa rd s t he r i sk neu t ra l l in e
c au t i ous shi f t on n e ga t ive l y frame d i t ems
.
.
Sub j e c t t o emp i ri ca l va l i da t i on ,
thi s ana ly s i s ha s the po t en t i a l fo r c la r i fyi ng gr oup i ndu ce d s hi ft s and the
e xi s t enc e o f the r i sky shi f t para di gm
.
Ex amina t i on o f the
"O f ind s
D
tha t thi s
ins t rumen t i s p o s i t i ve l y frame d , whi ch l ea ds t o the pr e d i c t i on o f a r i sky
s hi f t
.
Wou l d we cur re n t ly b e
re
-
e xami ni ng
"
the c au t i ous shi f t
"
para di gm had
S t one r ( 1 9 6 1 ) in i t i a l l y c ondu c t e d hi s expe r iment wi th a ne ga t i ve l y frame d
i ns t rumen t
"
The curr en t p er s p e c t ive s ugge s t s tha t the e nt i re para di gm ma y have b e en
"O and
e s tab l i she d by the gene ra l l y p o s i t ive frame o f the
ini t i a l u s e of thi s in s t rument
D
S t one r s ( 1 9 6 1 )
'
Fo l l owi ng S t on er s ( 1 9 6 1 ) re s ea rch , hi s
'
.
ini t i al c onclu s i on con t inu e s t o pe rme a t e i nt r odu c t o ry t e xt bo ok s and the
f olk l o re o f gr o up de c i s i on maki ng
.
I f an ent i re b ody o f re s e a rch can b e
frame d , we can onl y b e awe d by the e x t en t t o wh i ch i nd i vi dua l re s ea r cher s wi l l
b e b i a s e d by the way we a sk our r e s e arch q ue s t i ons
.
-
Th e
13
Fu tur e Ro l e o f Frami ng i n O r gani za t i ona l Be havi o r
In the s e c t i on s a bove , thre e r e s ea rch t opi c s t o wh i ch the frami ng conce p t
is
r
e l evan t we re i dent i f i e d
.
I t i s s ugg e s t e d tha t the framing c onc e p t can ( 1 )
c la r i fy a dd i t i ona l pa rad oxe s i n our fi e l d and ( 2 ) i ncre a s e our unde r s t andi ng
o f e xi s t ing the or i e s
.
Ex pe c t anc y the o ry ( c f
.
Mi t che l l ,
f or e xampl e ,
mak e s a numb e r o f a s s ump t i on s tha t Pr o s pe c t The ory a ddre s s e s
In mo s t common
.
f ormula t i on s o f e xpe c t anc y the o ry , va lue i s the c ent ra l c onc e p t , ra the r than
uti lity
The a r gument s i n favor o f u t i l i t y a r e p e r s ua s i ve ( von Neumann
.
Mo r ga n s t e r n ,
1 947 ;
Ho l l owa y ,
In a dd i t i on , e xpe c tanc y the o ry a s s ume s
tha t the re f e r en ce po i n t f o r eva l ua t i ng a l t e rna t i ve c our s e s o f a c t i on i s no t
cr i t i ca l
Ka hn eman and
.
Tve r sk y
'
( 1 9 7 9 ) Pr o s p e c t The o ry , in c ont ra s t , wou l d
s
s ugge s t tha t th i s re fe r ence p o in t i s c ru ci a l
,
pa rt i cula r l y in e va l ua t i ng the
mo t iva t i ona l f orc e s a s s o c i a t e d wi th a l t e rna t ive a c t i ons wi th va ry ing de gr e e s
o f r i sk
Tha t i s , Pr o s pe c t The o ry woul d s ugge s t tha t the o rde r pr e fe r ence s
.
b e twe en two cho i ce s o f behavi o r ma y de p end on the framing o f the mo t iva t i ona l
f or ce s o f the a l t e rna t ive cho i ce s
.
Many o f the mo s t p owe rfu l the o r i e s i n
org ani za t i ona l b ehavi o r have b e en d eve l op e d wi th a numbe r o f a s s umpt i ons
.
Ou r
mo s t c r i t i ca l fu tu re de ve l opment s may b e crea t e d by unrave l i ng s uch
a s sump t i ons
.
In add i t i on t o i t s r e l evanc y t o the ore t i ca l framework s in org ani za t i ona l
behavi o r , the con cep t o f frami ng ha s p o t ent ia l f o r e xpandi ng our unde r s t andi ng
o f ap pl i e d mana g er i a l pr o b l ems
.
For i l l us t ra t i on purp os e s , c ons i de r the a re a
o f j ob cho i ce "
An
empl oye e wi th f ive ye ar s o f e xper i enc e s inc e hi s M B A ha s a
re a s onab l e j o b , s e cur i ty , a nd an ave r ag e s a la ry f or s ome one wi th hi s
b a ck gro und
He curr e n t l y ha s the o p t i on o f abandon ing hi s curre nt s a f e
p os i t i on , and commi t t i ng hims e l f t o a hi gh r i sk , hi gh oppo r tun i t y s ta r t - u p
f irm
Wi l l he make a j ob change
.
.
.
.
.
,
"
15
i nt e re s t i ng re s ea rch , Davi s ( 1 9 7 1 ) s ug ge s t s tha t i nt e r e s t i ng r e s ea r ch i s
cr e a t e d
by
q ue s t i on in g the
"
as sump t i on gr o und
"
h e re tha t one d e f inab l e way o f i dent i fy i ng th i s
o f the re ade r
"
I t i s s ug ge s t e d
a s s ump t i on ground
e xamine the fra me i n whi ch a par t i cul ar para d i gm d eve l op ed
i de a s o f Kahneman and Tve r sky ( 1 9 7 9 ) and Davi s
.
.
"
is to
Comb ining the
we may fi nd tha t our
m os t int e re s t ing re s ea r ch i s s ue s can b e d i s c ove re d by e xamin ing the frame o f
the a s s ump t i on gr ound o f pa s t r e s ea rch
.
Re fe r enc e s
ent in mana g e r i a l de c i s i on m ak i n g, New
Ba z e rma n , M H Human j
Wi l e y and S
.
.
Y ork
" John
"
Ba z e rman , M H
A Cr i t i c al o ok a t the Ra t i ona l i t y o f Ne g o t i a t o r Judgment
Ame r i can Behavi o ra l S c i en t i s t , i n pre s s
.
.
.
.
Ba z e rman , M H , B e ekun R I , and S ch o o r man , F D
Pe r f ormanc e eva lua t i on in a
dynami c cont e x t " The impa c t o f a pr i o r commi tment t o the ra t e e
Journa l
o f Ap pl i e d Ps y cho l o gy , 1 9 8 2 , 67 8 7 3 -8 7 6
.
.
.
.
,
.
.
.
.
,
Ba z e rman ,
p re s s
M.H .
,
G i ul i an o ,
T.
,
and Appe lman , A
Es ca la t i on in i nd ivi dua l a nd
.
.
"
"
Ba ze rman M H ,
Ne a l e , M A
He ur i s t i c s i n ne go t i a t i on " imi t a t i ons t o
d i s pu t e r e s ol u t i on e f fe c t ivene s s In M H Ba z e rman
R J
ewi ck i
.
.
,
.
.
.
.
.
.
.
Ba z e rman , M H
The a cq ui s i t i on o f an
Ma gl i o z z i
T , and Ne a l e , M A
in t e gra t ive re spons e i n a c ompe t i t i ve mark e t
Aca demy o f Managemen t
A nnua l Me e t ing , 1 9 8 3
.
.
,
.
,
.
.
.
.
"
"
Ba z e rman M H ,
Ne al e , M A
He ur i s t i c s i n n e go t i a t i on " imi ta t i ons t o
di s pu t e r e s o lu t i on e f f e c t ivene s s In M H Baz e rman
R J
ewi ck i
Ne g o t i a t ing in Or g an i za t i ons Beve r l y H i l l s " Sa g e Pub l i shi ng
.
.
,
.
.
.
.
.
.
.
,
ID C
O
B r o ck n e r
J.
,
Rub in , J Z The s o c i a l ps y cho l ogy of ent ra pmen t in e s ca l a t in g
New Y ork " S pr inge r -V e r l ag 1 9 8 4
.
,
confl i c t s ,
Ca r t wr i ght
D
,
28
1 97 3 ,
,
.
.
,
De t e rm inant s o f s c i en t i f i c pr o gr e s s
.
2 2 2 -2 3 1
.
Ame ri can
Ps y cho l o g i s t
,
.
C on l on E J
and Wo l f , G
The mo de ra t ing e f f e c t s o f s t ra t e gy , vi s i b i l i t y
'
and invo lvemen t on a l l o ca t i on behavi o r "An e xt ens i on o f S taw s e s cal a t i on
.
,
.
. ,
0
Davi s , M S
Tha t s in t e re s t ing " Toward s a phe nomeno l o gy o f s o ci o l o gy and a
"
s oc i ol ogy o f phenomeno l ogy , Phi l os o ph y o f S o c ia l S c i enc e , 1 9 7 3 , 1 ,
"
.
'
.
3 09- 3 4 4
.
Far b er H , and Ka t z H
In t e re s t arb i tra t i on ou t come s and the i nc ent ive s t o
ba r ga i n
Indu s t r i a l and a b or Re l a t i on s R evi ew , 1 9 7 9 , 3 3 5 5 - 6 3
.
,
,
"
.
.
,
.
H o l l owa y , C
De ci s i on ma ki n g unde r unc er t a int y " Mode l s and cho i ce s ,
Engl ewo o d C l i f f s , NJ " Pren t i c e - Ha l l , 1 9 7 9
.
.
Kahneman ,
r i sk
.
and Tve r sky A
Pr o s p e c t The ory " An ana l y s i s o f de ci s i on unde r
E conome t r i c a , 1 9 7 9 , 4 7 , 2 6 3 - 2 9 1
D.
,
,
.
.
17
Kahneman , D , and Tve r sky , A
Ame r i can , 1 9 8 2 , 1 61 - 1 7 3
.
Ps ycho l o gy o f pr e fe rence s
.
.
S c i e nt i f i c
.
Ko chan , T
Co l l e c t ive ba rg a in ing and org ani za t i ona l b ehavi or r e s earch
In B
S taw and
Cummi ng s ( ed s ) Re s ea r ch in Or g an i z a t i ona l Behavi o r , V o l
Gr e enwi ch , CT " J A I Pr e s s , 1 9 8 0
"
.
.
.
.
.
.
.
.
.
.
Mi t che l l , T R
Ex pe ct anc y mode l s o f j ob s a t i s f a c t i on , o c cupa t i ona l pr e fere nc e
and e f fo r t " A the o r e t i ca l , me thodo l o g i ca l and empi r i ca l appra i s a l
P s y cho l o g i ca l Bu l l e t in , 1 9 7 4 , 8 2 , 1 0 5 3 -1 0 7 7
.
.
.
.
Nea l e , M A
and Ba z e rma n , M H
S y s t ema t i c de vi a t i on s from ra t i ona l i t y i n
ne go t ia t or b ehavi o r " The fr amin g of c onf l i c t and n e g o t i a t or
ove rc onf i denc e
ni ve r s i t y o f Ar i z ona Work i ng Pape r , 1 9 83
.
. ,
.
.
S t aw ,
S t aw ,
16
B .M.
"
.
Kn e e - de e p in the b i g muddy " A s t udy o f e s c a la t ing c ommi tment t o a
B .M.
1 976 ,
.
2 7-4 4 .
,
The e s ca la t i on o f c ommi tment t o a c our s e o f a c t i on
.
.
A c ad em y
of
S t on er J A F
A c ompar i s on o f ind ivi dua l and gr o up de c i s i ons i nvo lving
'
r i sk
npubl i she d Ma s t e r s the s i s , Ma s s a chus e t t s In s t i t u t e o f Te chno l o gy ,
S cho ol o f Indu s t r i a l Manag emen t , 1 9 6 1
"
.
.
,
.
.
.
Te ge r , A
Tha l er
R
,
"
To o mu ch inve s t e d t o
.
u i t , New
Y ork
" Pe rgamon
Towa rd a p os i t i ve the ory o f c ons ume r cho i c e
.
.
Pre s s , 1 98 0
.
Journa l o f Ec on omi c
Tve r sky A , and Kahneman , D , The Fr aming o f De ci s i on s and the Ps y cho l o gy o f
Cho i ce , S c i en c e , 1 9 8 1 , 2 1 1 , 4 5 3 - 4 5 8
.
.
,
.
V i n ok e r ,
Revi ew and the ore t i ca l ana ly s i s o f the e f fe c t s o f gr oup pr o ce s s e s
upon ind ivi dua l and gr oup de c i s i ons invo lvi ng r i sk
Ps y cho l ogi ca l
Bu l l e t in , 1 9 7 1 , 7 6 , 2 3 4 - 2 5 0
A
.
.
.
von Ne umann , J and Morg ens t e rn , O
The o py o f game s and e conomi c b ehavi or
Pr i nce t on " Pr i nce t on n ive r s i t y Pre s s , 1 9 4 7
.
"
.
.
,