Editing Sunk cost (section)

=== Framing effect ===
The framing effect which underlies the sunk cost effect builds upon the concept of [[extensionality]] where the outcome is the same regardless of how the information is framed. This is in contradiction to the concept of intentionality, which is concerned with whether the presentation of information changes the situation in question.

Take two mathematical functions:

# {{math|''f''(''x'') {{=}} 2''x'' + 10}}
# {{math|''f''(''x'') {{=}} 2 · (''x'' + 5)}}

While these functions are framed differently, regardless of the input "x", the outcome is analytically equivalent. Therefore, if a rational decision maker were to choose between these two functions, the likelihood of each function being chosen should be the same. However, a framing effect places unequal biases towards preferences that are otherwise equal.

The most common type of framing effect was theorised in Kahneman & Tversky, 1979 in the form of valence framing effects.<ref>{{Cite journal |last1=Levin |first1=Irwin P. |last2=Schneider |first2=Sandra L. |last3=Gaeth |first3=Gary J. |date=2 November 1998 |title=All Frames Are Not Created Equal: A Typology and Critical Analysis of Framing Effects |journal=Organizational Behavior and Human Decision Processes |volume=76 |issue=2 |pages=149–188 |doi=10.1006/obhd.1998.2804 |pmid=9831520 }}</ref> This form of framing signifies types of framing. The first type can be considered positive where the "sure thing" option highlights the positivity whereas if it is negative, the "sure thing" option highlights the negativity, while both being analytically identical. For example, saving 200 people from a sinking ship of 600 is equivalent to letting 400 people drown. The former framing type is positive and the latter is negative.

Ellingsen, Johannesson, Möllerström and Munkammar<ref>{{Cite journal |last1=Ellingsen |first1=Tore |last2=Johannesson |first2=Magnus |last3=Mollerstrom |first3=Johanna |last4=Munkhammar |first4=Sara |date=17 May 2012 |title=Social framing effects: Preferences or beliefs? |journal=Games and Economic Behavior |volume=76 |pages=117–130 |doi=10.1016/j.geb.2012.05.007  }}</ref> have categorised framing effects in a social and economic orientation into three broad classes of theories. Firstly, the framing of options presented can affect internalised social norms or social preferences - this is called variable sociality hypothesis. Secondly, the social image hypothesis suggests that the frame in which the options are presented will affect the way the decision maker is viewed and will in turn affect their behaviour. Lastly, the frame may affect the expectations that people have about each other's behaviour and will in turn affect their own behaviour.