A Study on Outcome Framing and Risk Attitude in Engineering Decisions Under Uncertainty

Abstract

Decision making is a central activity in the design of an engineered system and has a significant impact on project outcomes. Although much research exists on engineering decision making, relatively little addresses behavioral aspects of how engineers make decisions. This is a potentially significant gap, as factors such as the way in which information is communicated and presented to engineers can matter greatly. For example, cognitive psychology has demonstrated that the choices people make can be strongly influenced by how the options are framed even when the different framings are mathematically equivalent. This paper explores the impact of framing on the types of decisions engineers face. Given engineers' intense mathematical training, it is possible that they are less susceptible to framing effects. Thus, there is motivation to determine whether relevant findings can be replicated in an engineering context. This paper presents a set of positively and negatively framed design scenarios. Consistent with prior experiments, engineers in the positive (gain) framed scenarios were more likely to choose the less risky option for three of the four scenarios. One of the scenarios did not show this bias but did include a longer time horizon which likely explains the difference. Engineers were risk neutral when the scenarios were presented negatively (loss) framed, which is in contrast to prior experiments on nonengineering populations. These results motivate the future research into the impact of framing on engineering decision making and effective guidelines on how to create engineering processes and tools that leverage or avoid inducing cognitive biases.