Working Paper: NBER ID: w27265
Authors: Andrew Caplin; Daniel J. Martin
Abstract: Consumers often face an overwhelming amount of information when deciding between products, and one of the primary policymaking tools available to improve their informativeness is the framing of this information. We introduce a general theoretical approach that characterizes when one frame is revealed to provide robustly higher welfare than another. Because it is testable, adaptable, and both necessary and sufficient, our condition determines both whether frames are robustly welfare ranked in a particular data set and the overall proportion of data sets in which frames can be so ranked.
Keywords: Framing; Consumer Welfare; Information Theory
JEL Codes: D60; D83; D91
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Frame A (Y20) | Higher value of information than Frame B (D80) |
| Better-informed choices (D87) | Enhanced consumer welfare (D18) |
| Frame being revealed to have better-informed actions (D83) | Recognized as having a robustly higher value of information (D80) |
| Frame used (Y60) | Resulting welfare outcome (D69) |