Framing effect.
In plain English
The framing effect is the finding that the same options can pull different choices depending on how they are described. Tversky and Kahneman showed in 1981 that people shift their preferences when an identical outcome is framed as a gain versus a loss. In money, a 90 percent chance of keeping your money feels different from a 10 percent chance of losing it, and a fee framed as a discount for paying one way lands differently than a surcharge for paying another. The math does not move; the wording does, and the wording moves people.
01Why it matters
Marketing, fees, and financial products are worded to steer choices, so recognizing the framing effect helps you strip a pitch down to the actual numbers before deciding, rather than reacting to the packaging.
02The math, step by step
A card offer that says pay this way and save 3 percent draws people in, while the same deal described as pay that way and pay a 3 percent surcharge pushes them off, even though the price is identical. The gain frame attracts and the loss frame repels the very same terms.
03What this is NOT
It is not a difference in facts. Framing keeps the facts identical and only changes the wording. If the numbers actually differ, that is a real difference, not a frame; the effect is about identical outcomes described two ways.
04Receipts
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