PERCEIVED SOCIAL-CONTEXT AND RISK PREFERENCE - A REEXAMINATION OF FRAMING EFFECTS IN A LIFE-DEATH DECISION PROBLEM

This study examines the effects of perceived group context on subjects ' risk attitudes and their sensitivity to the framing of choice outcom es in a 'life-death' decision problem. It seeks to uncover the psychol ogical mechanisms underlying decision-making biases by systematically manipulating the decision context in which the 'life-death' problem wa s described. The study revealed that subjects' risk preferences varied as a function of the experimental manipulations, Previously observed reversals in preferences (framing effects) appeared in large-group con texts and disappeared in small-group and family contexts. When conside ring the fate of small groups, subjects unambiguously favored the prob abilistic outcome, no matter how the 'life-death' decision problem was framed. The empirical data obtained from the present study suggest th at human choice patterns are behaviorally distinguishable across large -group, small-group, and family social contexts.