Daniel Martin is an Assistant Professor in the Managerial Economics and Decision Sciences (MEDS) department at Northwestern University’s Kellogg School of Management. He is a behavioral and experimental economist who studies the processing and disclosure of information. For example, he investigates why firms do not voluntarily and clearly disclose information about product quality and why consumers do not pay full attention to information about prices or product quality.
Framing effects are often attributed to misperceptions. In this study, however, we document a large and robust framing effect that is not reflective of misperceptions. Our framing effect persists when agents gain experience, pay attention, and are provided with information that prevents miscalculations. We propose and provide evidence as to why our framing effect persists: the majority is driven by self-serving motives. Our results suggest that framing effects, as well as other behavioral biases driven by self-serving motives, may be notably robust to de-biasing conditions.