Framing is so important because it’s a way to get ‘free value’. Things well framed are perceived as well done—and perceived value is all there is.
I ran this one question poll on Mechanical Turk, Amazon’s data collection service, and Twitter to see how people perceive the same news. Each option describes the US labor market from mid-March to mid-April.
The question was, which one of these is the best (or least bad) way to describe what’s happened.
The most important data isn’t that one section of the pie is larger than another but that there are sections of the pie. If “135 million people remained employed” took the king’s share there would be nothing to figure out. In the many slices though we get many ideas.
Jason Zweig demonstrated this magnificently in a recent WSJ column. Imagine you’re of a certain age with a certain income and a certain promise of social security. It’s likely more than you realize. Zweig wrote:
The $2,000 a month that you and your spouse will each receive in the future has a present value of $772,235, according to OpenSocialSecurity.com.
That’s roughly what it would cost an insurance company to provide each of you with a guaranteed, inflation-adjusted $2,000 monthly payment for the rest of your lives (assuming you file for retirement benefits at age 70 and your spouse at 62).
So your expected Social Security payments are like a giant phantom annuity—a bundle of inflation-adjusted bonds you don’t own but whose income you have the right to receive. The same is true—usually without the ability to keep pace with inflation—if you are fortunate enough to have a defined-benefit pension plan.
Much of poker is played by the number. Professionals fold many more hands than they play because the numbers tell them that. But people don’t like to feel like automatons. They want action. When Annie Duke started teaching clients how to play poker she had to reframe how they saw the game.
Duke’s insight was to get her clients to choose to play by the numbers. She appealed to their meta side. They had to see the analytical next to the emotional and make a choice from those two options.
People are relative thinkers and many many decisions come down to framing one thing against another. It works for news, marketing, home purchases, dinner options, and dates. It works for everything.