Suppose 5,000 students were split into two groups of 2,500. Both groups were fir

Question

Suppose 5,000 students were split into two groups of 2,500. Both groups were first presented with an image of a new high-end pair of shoes produced by UGG, a footwear company.
The first group was given the following statement and then asked the following question: “The normal retail price of these shoes is $200. Would you be willing to pay $125 for them?”
The second group was given the following statement and then asked the following question: “The normal retail price of these shoes is $450. Would you be willing to pay $125 for them?”
Suppose that 13 percent of the students in the first group answered yes and that 63 percent of the students in the second group answered yes. It is likely that more students in the second group were willing to pay $125 for the pair of shoes because they were told the normal price was much higher. This is an example of a ________ effect in decision-making.
A. bootstrapping
B. market-making
C. utilitarian
D. framing
E. psychosomatic

Explanation / Answer

D. framing

Explanation: Framing refers to a cognitive bias in which the preference of people on a particular choice varies depending on how the choice is presented to them. The offer was presented to the second group in a more lucrative way. So, much more students in group 2 answered yes than group 1.

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.