Reduced framing effect: Experience adjusts affective forecasting with losses

The framing effect refers to the phenomenon that phrasing the same outcomes as gains or losses leads to different risky choices. Most of the framing literature is based on descriptive scenarios, whereas people in real life must make decisions from experience because they rarely receive precise descriptions. However, whether and how framing effects occur in experience-based decisions remain important open questions. In three experiments, we demonstrate that the framing effect is less pronounced in experience-than in description-based decisions. We explain this finding on the basis of affective forecasting with losses. In descriptive conditions, individuals overestimate the impact of potential losses on their emotional reactions, whereas experience helps people become aware of their ability to rationalize losses and mitigates this erroneous affective forecasting, thereby reducing the propensity for risk seeking. Our results offer insight into the specific role of experience in framing effect: experience adjusts affective forecasting with losses, which reduces the framing effect.