Prospect theory can predict the susceptibility of framing effect such that decision-makers are opt for taking risks when they feel lost for the static decision tasks, where one only needs to make one decision, but the theory fails to predict the susceptibility for the dynamic decision tasks, where one needs to make a group of decisions continuously. The dynamic decision process is closer to the real situation of decision-making in practice than the static one, thus, it needs to be predicted accurately. This study aims to discuss the predicting way for the susceptibility of the framing effect in a dynamic decision process while keeping the idea of prospect theory. Firstly, we hypothesize that prospect theory cannot predict the framing effect accurately during dynamic decision because there is a variable of decision-makers' s personal expectation occurring during the dynamic process. Secondly, we describe this process by a mental accounting model, which is composed of a group of operations for calculating the personal expectation variable. Finally, an experiment with a group of tasks related to the financial problem is designed to collect data for modeling this process. We expect that the susceptibility of the framing effect is not only affected by framing contents, but also by the past performance and achievements in the decision-making process. We also expect that this decision-making process can be modeled by mental accounting operations. The area of predicting the framing effect on the dynamic decision process can be investigated by extending the conventional prospect theory.
Yuan Ma, Japan Advanced Institute of Science and Technology, Japan
Tsutomu Fujinami, Japan Advanced Institute of Science and Technology, Japan