Framing as Information Design
24 Pages Posted: 3 Mar 2018
Date Written: February 22, 2018
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
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