Framing effects can manipulate investor perceptions from "summary" of Beyond Greed and Fear:Understanding Behavioral Finance and the Psychology of Investing by Hersh Shefrin
Framing effects play a crucial role in shaping the way investors perceive information and make decisions. These effects can significantly influence how investors assess risks and rewards, leading to potentially irrational behavior. By presenting information in a particular way, framing can sway investors towards certain choices, even if those choices may not be in their best interest. For example, framing an investment as having a 90% chance of success versus a 10% chance of failure can lead investors to view the investment more favorably, despite the information being essentially the same. This shift in perception can impact investment decisions and ultimately affect portfolio performance. Furthermore, framing effects can also impact investor reactions to m...
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