Worst-Case/Loss-Oriented Frames

 

By
Julian Ouellet

October 2003

Framing describes how people choose or are told to view a situation.[1] Imagine, for example, walking around town with a picture frame and being able to see only through the frame. Moving the frame will shift what you see; what you see may have profound implications for how you understand the scene. Imagine looking through the frame at a busy intersection with nice shops on the corners. From this frame, one might imagine a wealthy neighborhood of some sort. Now, imagine that just outside the frame is a person begging for food. If this person were in the frame, would the meaning change?

Framing is the method by which we give situations meaning. Loss-oriented framing implies that people tend to frame any choice in terms of the possible risks involved. Studies have shown that, in new situations, people tend to consider and weigh the possible risks more strongly than the possible benefits. Work in rational-choice theory (a theory about how people make choices) illustrates that most people tend to value the consequences of losses more than the consequences of gains, and act in such a way as to minimize losses. Put another way, they fear a bad outcome, more than they expect or pursue the good one when risks are involved.[2] This method of making choices is sometimes referred to as worst-case or loss-oriented framing.


Frank Blechman believes the biggest obstacles for conflict intervenors are cynicism and lack of hope.

In intractable conflicts, the point is not to make people take risks for risk's sake, but that people fear moving from the status quo. This is even if the status quo is unsustainable or painful, because they fear the situation will become worse, more than they look forward to it getting better.

Rational Choice Theory

Rational choice theory assumes that people act rationally, meaning they act to maximize their gains and minimize their losses. This is often investigated using game theory. Here people are given relatively simple dilemmas and their choice about how to solve them illustrates their choices. The most common example is the prisoners' dilemma game, when two players ("prisoners") are given the choice of confessing to a crime, or not, and the outcome is determined by the choices both people make. Psychologists have shown that if the game is only played once, most players confess, which avoids the maximum loss.

Prospect Theory

Prospect theory, developed by Tversky and Kahneman, does not use the simple dyadic payoff structure that game theory uses.[3] Instead, it argues that people center their expectations around a variable and moveable reference point. The reference point is most easily thought of as the status quo, though it is not always so. In most situations, people are more likely to ensure that they preserve their current situation, than to risk losses by seeking potential improvements. Indeed, people tend to sacrifice a great deal in order to maintain their current situation. As Levy notes, "[p]eople tend to be risk-averse in choices among gains, but risk acceptant with respect to losses."[4] This is often the problem in intractable conflicts; the risks required to resolve the conflict seem much too great compared to the potential losses. This sort of framing is what leads ultimately to hurting stalemates.

Loss-oriented framing is, ultimately, this tendency to minimize losses while missing opportunities to improve one's situation. Given this tendency, how do individuals make choices? People will tend to overvalue low probabilities and undervalue high probabilities. Thus, choice, according to prospect theory, occurs in two phases:

In the editing phase the actor identifies the reference point, the available options, the possible outcomes, and the value and probability of each of these outcomes. In the evaluation phase the actor combines the values of possible outcomes . . . with their weighted probabilities . . . and then maximizes over the product (the "prospective utility").[5]

Individuals will make choices that minimize losses, and they are likely to take absurd risks to do so. This is the end result of the two-phase choice theory. In intractable conflicts, especially violent conflicts, this two-phase method of choosing leads individuals to be wary of cooperation. The probability of success is perceived as being low, and the potential losses seem quite high.

Intervenors must move groups beyond a reference point that projects cooperation as a high-risk choice. This can be accomplished through reframing, as discussed above for the individual choices necessary to resolve the Prisoner's Dilemma. Reference points are not static, and they do not necessarily represent the status quo. The ability of intervenors to reframe the issue, such that continuing inaction represents a loss from the reference point, is the key determinant of the success of conciliation movements.

Reframing strategies revolve around reorienting the parties toward a reference point. For example:

  • one strategy frames losses as foregone gains. That is, the status quo is a perpetual state of loss from a possible higher state.
  • similarly, the status quo in a deadlocked situation is often the reference point for negotiations. Here, third parties should focus on extended interactions as the foundation of possible losses and gains. In a mutually hurting stalemate, both sides are getting hurt, while neither can prevail (i.e. win) creating a condition of constant losses vis-a-vis an expected outcome.[6] As Zartman argues, recognizing the mutually hurting stalemate opens up the possibility for conciliation.[7]

Prospect theory suggests that not only is worst-case framing inefficient, it also prevents minimal levels of cooperation in environments of little trust and communication. First steps for parties seeking conciliation should obviously revolve around increasing the levels of, and the number of channels open for, communication. In addition, prospect theory suggests that worst-case or loss-oriented framing will remain a part of the conflict landscape; the trick is to change one's point of view about what constitutes a loss.


[1] Khelton Roads, Admiring the Persuasive Frame, accessed on 3 July 2003; available from http://www.workingpsychology.com/admirefr.html; Internet.

[2] Daniel Kahneman and Amos Tversky, "Prospect Theory: An Analysis of Decision Under Risk," Econometrica Vol. 47, (1979) pp 263-91. Robert Axelrod, The Evolution of Cooperation, (New York: Basic Books, 1984). Jack Levy, "Loss Aversion, Framing Effects, and International Conflict," in Handbook of War Studies II, M. Midlarsky, ed., ( Ann Arbor , University of Michican Press, 2000), pp. 193-221.

[3] Kahneman and Tversky, Prospect Theory. Jack Levy "Loss Aversion."

[4] J. Levy, "Loss Aversion." **need a page #

[5]J. Levy, "Loss Aversion," 198-9

[6] School of Advanced International Studies, "Peacemaking -- Timing," [document on-line], accessed on 3 July 2003; available from http://www.sais-jhu.edu/CMtoolkit/index.php?name=pm-timing#Mutually%20Hurting%20Stalemate; Internet.

[7] ibid


Use the following to cite this article:
Ouellet, Julian. "Worst-Case/Loss-Oriented Frames." Beyond Intractability. Eds. Guy Burgess and Heidi Burgess. Conflict Information Consortium, University of Colorado, Boulder. Posted: October 2003 <http://www.beyondintractability.org/essay/worst-case-frames>.


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