Framing and conflict: aspiration level contingency, the status quo, and current theories of risky choice

Abstract

The effect of positive versus negative frames on risky choice was examined for a variety of scenarios and risks. Preferences in the positive domain were strong and mainly risk averse, with notable exceptions. Preferences in the negative domain, however, were marked by their inconsistency, shown both by an overwhelming lack of significant majority preferences and a surprisingly strong tendency of individual subjects to vacillate in their negatively framed choices across presentations. This finding is accounted for by a proposed aspiration level contingency in which aspiration levels are systematically set to be more difficult to achieve in the face of a perceived loss than a gain. The implications of the results, and the aspiration level contingency, are explored with respect to current theories of risky choice, including Kahneman and Tversky's (1979) prospect theory and Lopes's (1987, 1990) security-potential/aspiration theory.