Framing, Information, and Welfare
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.
We thank Edwin Muñoz Rodriguez for excellent research assistance and Jose Apesteguia, Victor Aguiar, Miguel Ballester, Henrique de Oliveira, Ben Handel, Josh Schwartzstein, Bruno Strulovici, and Dmitry Taubinsky for valuable feedback. All mistakes are our own. We thank the Alfred P. Sloan and NOMIS Foundations for support. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.