Framing as Information Design

24 Pages Posted: 3 Mar 2018

Date Written: February 22, 2018

Abstract

We propose an information design framework for studying the welfare impact of frames. In our model, the frame determines a decision maker's information structure, which summarizes his or her beliefs about the consequences of taking each action. We imagine a policy maker who would like to select the welfare optimal frame based only on the decision maker's choices under each frame. We extend results from the information design literature to show when and how the policy maker can recover both the welfare order over options and the relationship between frames and information structures. We then demonstrate how this allows the policy maker to rank frames according to their informativeness and expected utility. Finally, we consider the welfare impact of information costs by showing how the policy maker can rank frames net of information costs.

Keywords: Framing effects, bounded rationality, incomplete information, information design, limited attention

Suggested Citation

Caplin, Andrew and Martin, Daniel, Framing as Information Design (February 22, 2018). Available at SSRN: https://ssrn.com/abstract=3124194 or http://dx.doi.org/10.2139/ssrn.3124194

Andrew Caplin

New York University (NYU) - Department of Economics ( email )

269 Mercer Street
New York, NY 10003
United States
212-998-8950 (Phone)
212-995-3932 (Fax)

HOME PAGE: http://www.econ.nyu.edu/user/caplina/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Daniel Martin (Contact Author)

Northwestern University - Department of Managerial Economics and Decision Sciences (MEDS) ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

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