Journal of Economic Psychology 26 (2005) 1–20

www.elsevier.com/locate/joep

The framing effect and risky decisions:

Examining cognitive functions with fMRI
Cleotilde Gonzalez a,*, Jason Dana a,
Hideya Koshino b, Marcel Just c
a
Social and Decision Sciences, Carnegie Mellon University, Pittsburgh, PA 15213, USA
b
Department of Psychology, California State University, San Bernardino, CA 92407, USA
c
Center for Cognitive Brain Imaging, Department of Psychology, Carnegie Mellon University,
Pittsburgh, PA 15213, USA

Received 7 November 2003; received in revised form 17 August 2004; accepted 23 August 2004
Available online 5 November 2004

Abstract

The ‘‘framing effect’’ is observed when the description of options in terms of gains (positive
frame) rather than losses (negative frame) elicits systematically different choices. Few theories
explain the framing effect by using cognitive information-processing principles. In this paper
we present an explanatory theory based on the cost–benefit tradeoffs described in contingent
behavior. This theory proposes that individuals examining various alternatives try to deter-
mine how to make a good decision while expending minimal cognitive effort. For this study,
we used brain activation functional magnetic resonance imaging (fMRI) to evaluate individ-
uals that we asked to choose between one certain alternative and one risky alternative in
response to problems framed as gains or losses. Our results indicate that the cognitive effort
required to select a sure gain was considerably lower than the cognitive effort required to
choose a risky gain. Conversely, the cognitive effort expended in choosing a sure loss was equal
to the cognitive effort expended in choosing a risky loss. fMRI revealed that the cognitive
functions used by the decision makers in this study were localized in the prefrontal and
parietal cortices of the brain, a finding that suggests the involvement of working memory
and imagery in the selection process.

2004 Elsevier B.V. All rights reserved.

*
Corresponding author. Tel.: +1 412 268 6242; fax: +1 412 268 6938.
E-mail address: [email protected] (C. Gonzalez).

0167-4870/$ - see front matter
2004 Elsevier B.V. All rights reserved.
doi:10.1016/j.joep.2004.08.004
2 C. Gonzalez et al. / Journal of Economic Psychology 26 (2005) 1–20

JEL classification: D8; D80; D81

PsycINFO classification: 2500; 2340
Keywords: Framing effect; Decision-making; Risk; fMRI

1. Introduction

The ‘‘framing effect’’ is observed when a decision makerÕs risk tolerance (as im-
plied by their choices) is dependent upon how a set of options is described. Spe-
cifically, peopleÕs choices when faced with consequentially identical decision
problems framed positively (in terms of gains) versus negatively (in terms of
losses) are often contradictory. The ‘‘Asian disease problem’’ described by Tver-
sky and Kahneman (1981) is a classic example of the framing effect. Decision
makers were asked to choose between a certain (i.e., sure) or a probabilistic
(i.e., risky) option to save lives (positive frame) or minimize deaths (negative
frame) from an unusual disease:

Imagine that the United States is preparing for an outbreak of an unusual Asian dis-
ease that is expected to kill 600 people. Two alternative programs to combat the disease
have been proposed. Scientific estimates of the consequences of the programs are as
follows:
Positive frame:
If Program A is adopted, exactly 200 people will be saved.
If Program B is adopted, there is a 1 in 3 probability that all 600 people will be saved
and a 2 in 3 probability that no people will be saved.
Negative frame:
If Program C is adopted, exactly 400 people will die.
If Program D is adopted, there is a 1 in 3 probability that nobody will die and a 2 in 3
probability that all 600 will die.

Researchers who examine responses to problems of this sort generally find that
negatively framed problems primarily elicit risky responses while positively framed
problems primarily elicit more sure (i.e., less risky) responses. After consideration
of the above example, most people chose options A and D, despite the fact that in
terms of consequences, these choices are contradictory (A is equivalent to C, as B
is to D). People appear to exhibit a general tendency to be risk seeking when con-
fronted with negatively framed problems and risk averse when presented with posi-
tively framed problems.
In the past 30 years, hundreds of empirical studies 1 have been conducted to dem-
onstrate and investigate the framing effect in many different contexts (Kuhberger,
1998). Similarly, many theories have been developed to explain human behavior

1
An average of 15 studies per year since the mid-80s (Kuhberger, 1998).
 C. Gonzalez et al. / Journal of Economic Psychology 26 (2005) 1–20 3

based on assessments of gains and losses (Kuhberger, 1997). Despite all this research,
cognitive theories designed to evaluate the processing demands and the kind of cog-
nitive functions involved in the framing effect are very scarce. In this paper we pro-
pose a cognitive model based on cognitive cost–benefit tradeoff theory (Payne,
Bettman, & Johnson, 1993). In the proposed model, costs and benefits interplay with
cognitive and affective processes. In addition, we test this model by using functional
magnetic resonance imaging (fMRI), a technique that helps us measure the cognitive
effort involved in making a choice.

1.1. Background: Framing effect theories

Multiple theories have been devised to explain the framing effect (Kuhber-
ger, 1998). These are broadly divided into formal, cognitive and motivational
theories.
Prospect Theory, the most well-known formal theory, explains the framing effect
in terms of the value function for goods perceived as gains and losses from a refer-
ence point (Kahneman & Miller, 1986b; Kahneman & Tversky, 1979). Whether an
outcome is perceived as a gain or a loss depends upon the individualÕs reference
point, which is usually taken to the ‘‘status quo’’ asset level at the time of the choice.
The value function yields the preference value assigned to outcomes, and is concave
for gains, convex for losses, and steeper for losses than for gains. This functional
form implies that decision makers are more sensitive to losses than to gains and ex-
hibit diminishing marginal sensitivity to both. Therefore, people will tend to opt for
a sure alternative perceived as a gain rather than for a risky alternative of equal ex-
pected value, while the converse will hold true for perceived losses.
Cognitive theories are designed to determine the cognitive processing involved in
weighting gains and losses. For example, the fuzzy-trace theory proposes that the
framing effect is the result of superficial and simplified processing of information
(Reyna & Brainerd, 1991). To evaluate this theory, researchers suggested and tested
mechanisms by which decision makers might simplify framing problems by reason-
ing in qualitative patterns rather than in probabilistic and numerical patterns. The
findings suggest that participants follow the path of greatest simplicity by using sim-
plification mechanisms to reduce cognitive demands.
More comprehensively, cognitive cost–benefit tradeoff theory defines choice as a
result of a compromise between the desire to make a correct decision and the desire
to minimize effort (Payne et al., 1993). This theory holds that individuals initially
peruse the available alternatives to determine if they can make a good decision
and expend minimal cognitive effort. They only commit to a more complicated cog-
nitive effort if they cannot fulfill their desire to arrive at a good decision by embrac-
ing a simpler alternative. Although this is an appealing explanation of the framing
effect, this model ignores affective processes that should play an important role in
determining what constitutes a good decision.
Motivational theories explain the framing effect as a consequence of hedonic
forces, such as the fears and wishes of an individual (Lopes, 1987; Maule, 1995).
According to these models, decision makers assign stronger value to feelings of
4 C. Gonzalez et al. / Journal of Economic Psychology 26 (2005) 1–20

displeasure than to feelings of pleasure, and this disparity increases proportionately

with the amount of gain or loss involved in a decision (Mellers, Schwartz, & Ritov,
1999). In other words, like Prospect TheoryÕs assumption that losses loom larger
than equivalent gains, motivational models are based on the claim that the emotions
evoked by the losses generally are greater than those evoked by gains.
We will present a theory which brings cognitive and affective theories together.
This new model proposes an interplay of the cognitive cost–benefit tradeoff and
the motivational models to explain the choice process that leads to the framing effect
and perhaps to other decisions under risk and uncertainty. The model is additionally
motivated by recent findings from neuroscience that may prove relevant to econom-
ics and decision making.

1.2. A cognitive–affective tradeoff model

We propose that the framing effect occurs due to a tradeoff between the cognitive
effort required to calculate expected values of an alternative (if processing is costly,
people are less likely to choose the stimulus) and the affective value of the alternative
(if the outcome produces a feeling of displeasure, people are less likely to choose the
stimulus).
In a positive frame, the compromise between arriving at a good decision and min-
imizing cognitive effort is easy to achieve; for example, selecting the option in which
‘‘200 people will be saved’’ feels ‘‘correct’’ in an emotional sense and is effortless (i.e.,
no calculations are necessary). If the decision maker expends the cognitive effort re-
quired to analyze the more risky option, this alternative also will feel emotionally
correct and thus appear viable. In contrast, such compromises are more difficult
to attain in the negative frame. Although the option in which ‘‘400 people will
die’’ is easy to analyze the relatively bad outcome makes it a less than ideal choice
(i.e., strong feeling of displeasure). Thus when selecting among options presented
in a negative frame, individuals are more willing to undertake the cognitive effort de-
manded to assess the more risky option because they are more focused on improving
the outcome.
Payne et al. (1993) have published findings showing that individuals take longer to
make decisions when the options are framed as losses rather than gains. But does
that mean that cognitive effort is greater in the negative than in the positive frame
or does that mean that the affective cost is larger? And how would this cost vary
for different risk levels? We propose that the costs and benefits involved in this kind
of choices are of two types—cognitive and affective—and that both play a role in the
framing effect. On the one hand, the cognitive effort involved in calculating an ex-
pected value is larger in risky than in certain choices and on the other hand, the affec-
tive cost is higher for losses than gains.
Neuroscience can help disentangle these issues, as it is possible to measure the
amount and strength of processing involved in making choices. A better understand-
ing of the physical mechanisms by which human decisions are made is of growing
interest for both economists and neuroscientists (Glimcher, 2003). fMRI studies sug-
gest that cognition and emotion integrate in the prefrontal cortex (PFC) of the brain
 C. Gonzalez et al. / Journal of Economic Psychology 26 (2005) 1–20 5

when making simple choices (Gray, Braver, & Raichle, 2002). 2 Independently, the
PFC has been associated with both affective processes and with the processing of risk
and uncertainty.
Damasio and colleagues have documented the role of the PFC in decision making
(Bechara, Damasio, & Damasio, 2000). The most general conclusion from these
studies is that emotional defects produce impaired decision making and that a sec-
tion of the PFC known as the ventromedial prefrontal cortex (BA 11, 12, 13, and
25) is particularly important to decision making. Their methodology often involves
patients with lesions in the PFC as well as healthy participants (Bechara, Damasio,
Tranel, & Damasio, 1997).
The task used in their studies involves two decks of cards that produce negative
expected values in the long run but have extreme gains and losses and two other
decks of cards that produce positive expected values with less extreme outcomes.
The main finding is that PFC patients return rapidly to the less advantageous decks
after suffering a loss, although the immediate emotional reaction (measured by skin
conductance) to losses is the same as in normal subjects. They explain the results
with the somatic-marker hypothesis which poses that decision making is dependent
on emotional processes. As suggested by their results, damage in the ventromedial
prefrontal cortex precludes the use of somatic signals necessary to guide decision
making in an advantageous direction (Bechara et al., 2000).
In addition to affective processes, the PFC has been associated with processing
risk and uncertainty in decision making. Different versions of a guessing task have
been used to examine risky decisions (Elliott, Rees, & Dolan, 1999; Paulus et al.,
2001; Rogers et al., 1999). For example, activity in the PFC increases during individ-
ualsÕ consideration of uncertain rather than certain conditions in two-choice predic-
tion tasks that have no ‘‘correct’’ response (Elliott et al., 1999; Paulus et al., 2001;
Rogers et al., 1999). Conditions with uncertain outcomes elicit more activity in the
prefrontal and parietal cortices (BA 10, 7, and 40) than do those with assured out-
comes (Paulus et al., 2001). Furthermore, the PFC has also been associated with dif-
ferential activation in alternatives involving monetary rewards and penalties
(Delgado, Nystrom, Fissel, Noll, & Fiez, 2000; Elliott, Friston, & Dolan, 2000;
Knutson, Fong, Adams, Varner, & Hommer, 2001; OÕDoherty, Kringelbach, Rolls,
Hornak, & Andrews, 2001). PFC activity continues for a longer period of time after
a reward feedback than after a punishment feedback (Delgado et al., 2000). An
fMRI study of the Prospect Theory also addresses the anticipation and receipt of
monetary rewards and penalties (Breiter, Aharon, Kahneman, Dale, & Shizgal,
2001). When expectations of and responses to monetary gains and losses were
mapped to brain activity, higher PFC (BA 10) activity was found in response to
the size of the rewards or penalties than to whether they were gains or losses.
In summary, this research proposes a two-pronged explanation to describe the
posited connection between the PFC and the formulation of responses to positively

2
See Appendix A for a brief introduction to the brain cortex, the main brain regions and the more
specific functional areas.
6 C. Gonzalez et al. / Journal of Economic Psychology 26 (2005) 1–20

and negatively framed problems. First, the desire to arrive at a good decision can be
heavily charged with emotions in people attempting to do well and avoid bad out-
comes. Second, the desire to minimize cognitive effort can lead to activation in the
PFC as individuals determine the expected value of various alternatives. Thus we ex-
pect to observe an interaction between the activations associated with frame and risk
of the selected alternative. If cognitive and affective processes interplay to produce
different choices in positive and negative frames, we should be able to see differential
brain activity due to both the frame and the risk of the outcome. The negative frame
would produce more feelings of displeasure than the positive frame resulting in more
brain activity in the PFC; at the same time risky alternatives would be more cogni-
tively difficult due to the calculation of an expected value, producing higher PFC
activation than the certain choices.

2. Methods

2.1. Participants

Fifteen healthy, right-handed college student volunteers (5 females, 10 males)

gave signed, informed consent to participate on this study, which was approved
by the University of Pittsburgh and the Carnegie Mellon Institutional Review
Boards. They were paid a standard amount of 30 dollars including training time in
the lab and time in the MRI scanner.
Participants were familiarized with the scanner, the fMRI procedure, and the risk
task by responding (while in the scanner) to four problems in the same format as the
ones they would receive during the study. The data for three participants were dis-
carded due to the participantsÕ excessive head motion during testing. Additionally,
the data for two other participants who had zero responses to one of the conditions
were discarded.

2.2. Experimental design

Participants were asked to make 20 choices in response to 10 different problems,

each of which was presented in both positive and negative frames. A meta-analysis of
previously published articles was used to select stimulus items that have been docu-
mented to clearly demonstrate the influence of framing on risky decision making
(Kuhberger, 1998). The problems were in the format of the well-known (and afore-
mentioned) Asian disease problem, with two possible responses: one certain outcome
and one risky outcome. The positive and negative articulations of each problem were
presented randomly with one caveat: the two framings of each problem always were
separated by at least one other problem. The order of the certain and risky options
was counter-balanced within both framing conditions.
Choice trials were presented one at a time and were separated by rest periods to
allow for event-related analysis. Each trial began with the 10-s written presentation
of a problem portrayed on a display in the scanner. The two choice options then
 C. Gonzalez et al. / Journal of Economic Psychology 26 (2005) 1–20 7

were added to the display, and the cumulative display remained visible for 18 s. 3
Participants were instructed to make a decision and wait for the next screen to ap-
pear. Choices were entered by pushing one of the two buttons on a control box. Par-
ticipants could enter their choices at any time during the 18-s response period. A
message indicating that time was about to expire was displayed 2 s before the choice
interval elapsed. Each trial was followed by a rest period of 12 s to allow the hemo-
dynamic response to diminish. Five fixation periods of 25 s were interspersed and dis-
tributed evenly throughout the acquisition to obtain a control base-line measure of
brain activation with which to compare the experimental conditions. During the rest
and fixation periods, an ‘‘X’’ was displayed at approximately center screen.

2.3. MRI acquisition parameters

The study was conducted in a GE 3.0 Tesla scanner at the Magnetic Resonance
Research Center of the University of Pittsburgh Medical Center. The fMRI data
for each participant were acquired in a single run consisting of 1030 images per vol-
ume. The run lasted approximately 18 min, during which the participant solved a
total of 20 problems, each presented for a total of 28 s, with a data sampling rate
of 1 Hz (TR = 1 s). Sixteen functional slice images were acquired in an oblique-axial
plane as shown in Fig. 1. The pitch angle of the images ranged from 15 to 28,
TR = 1000 ms, TE = 18 ms, flip angle = 70, and a 3.125-mm · 3.125-mm · 5-mm
matrix voxel size with a 1-mm gap.
A 124-slice axial T1-weighted 3D Spoiled GRASS structural volume scan with
TR = 25 ms, TE = 4 ms, flip angle = 40, FOV = 24 cm and a 256 · 192 matrix size,
was acquired for each participant after the functional data were acquired. This scan
was used in parcellating the functional images into anatomically predefined regions
of interest (see below).

2.4. fMRI data analysis

Image preprocessing was performed to correct for in-plane head motion and sig-
nal drift using FIASCO (Eddy, Fitzgerald, Genovese, Mockus, & Noll, 1996; further
description of the tools available at www.stat.cmu.edu/~fiasco/). The fMRI data ob-
tained during the first 6 s after stimulus presentation were discarded to accommodate
the rise of the hemodynamic (BOLD) response to its peak level (Bandettini, Wong,
Hinks, Tokofsky, & Hyde, 1992).
To compare the volume of activation across the experimental conditions, a
priori regions of interest (ROIs) were defined for each participant. The ROIs were
defined using the parcellation method originally described by Rademacher, Gala-
burda, Kennedy, Filipek, and Caviness (1992) and subsequently refined by Cavi-
ness, Kennedy, Bates, and Makris (1996). Because each individual cortical
anatomy is different, the ROIs were drawn on the structural images of each

3
The duration of the two presentation intervals was determined by conducting pilot studies.
8 C. Gonzalez et al. / Journal of Economic Psychology 26 (2005) 1–20

Fig. 1. Regions of interest (ROIs) with slice prescription.

participant to precisely target the anatomical regions of interest (the surfaces of the
ROIs are shown in Fig. 1). The method has been consistently and successfully used
in many previous studies to compare the amount of activation in a given region
across conditions (e.g., Just et al., 2001; Newman, Just, & Carpenter, 2002). The
ROIs abbreviations as used in this study and their corresponding Talairach coor-
dinates are listed in Table 1.
To investigate the patterns of activation according to the response variable, the
activation data was sorted with respect to both the frame and the response to form
four groups: positive–certain, positive–risky, negative–certain, and negative–risky.
The number of problems was equalized per subject to enable analysis of the same
number of images per condition. For each individual, the problems per condition
were chosen to match the number of problems in the individual with the minimum
number.
Activation was quantified for each of these four conditions using FIASCO. First,
a t map was constructed by computing the difference between each voxelÕs activation
in each condition and the base-line measure of activation (the fixation period). Vox-
els whose signal change exceeded base-line by a t value >5.5 were considered active.
This threshold yielded an alpha-level of less than 0.02 after Bonferroni correction for
16,000 voxels in all regions of interest.
Once the number of activated voxels was calculated, the mean percent increase in
the amplitude of activation relative to the base line condition was calculated for
those voxels. These two values, the number of voxels and the change in activation
were used to calculate the dependent measure in this study (sum of signal intensity,
SSI). SSI was calculated by adding the percentage change in signal intensity for each
voxel activated in a particular condition and comparing this integral measure across
 C. Gonzalez et al. / Journal of Economic Psychology 26 (2005) 1–20 9

Table 1
ROIs and Talairach coordinates
ROI Description Talairach coordinates
X Y Z
Frontal
LDLPFC Left-dorsolateral prefrontal cortex 30.8 27.9 37.9
LFEF Left-frontal eye field 43.1 3 45.3
LOPER Left-pars opercularis 44.8 12.9 25
LPOSTPRECEN Left-posterior precentral sulcus 41.2 4.8 43.4
LTRIA Left-pars triangularis 41.1 22.5 15.4
RDLPFC Right-dorsolateral prefrontal cortex 35.7 21.7 40.6
RFEF Right-frontal eye field 41.3 9.1 42.2
ROPER Right-pars opercularis 47.1 13 19.3
RPOSTPRECEN Right-posterior precentral sulcus 38.8 1.3 48
RTRIA Right-pars triangularis 42.9 25.2 20.3
SMA Supplementary motor area 0.1 5.6 68.2
SMFP Superior medial frontal/paracingulate 0.2 22.4 54.4
Parietal
LIPL Left-inferior parietal 44 58.4 28.8
LIPS Left-intraparietal sulcus 28.3 65.4 46.7
LSGA Left-supramarginal gyrus 52.5 37.6 37.8
RIPL Right-inferior parietal 46.8 50.5 34.7
RIPS Right-intraparietal sulcus 31.3 62.1 45
RSGA Right-supramarginal gyrus 51.2 25.8 46.5
Temporal
LIT Left-inferior temporal 42.5 61.3 2
LT Left-temporal 55.6 32.4 7.5
RIT Right-inferior temporal 44.4 62.3 2.3
RT Right-temporal 52.2 32.1 8.3
Occipital
CALC Calcarine fissure 4.3 77.1 8.9
LIES Left-inferior extrastriate 21.2 75.8 1.6
LSES Left-superior extrastriate 16.2 82.6 36.8
OP Occipital pole 3.1 90.7 8.9
RIES Right-inferior extrastriate 24.6 77.9 1.1
RSES Right-superior extrastriate 23.9 83.2 27.9

conditions. This measure, first reported by Xiong, Rao, Gao, Woldor, and Fox
(1998), has since been used in many brain imaging articles. All statistical analyses in-
volved within-subjects ANOVAs with both frame and risk as within-subjects
variables.
Although this study was particularly motivated to do analyses on the ROIs of the
PFC there is little information on the role of other cortical components on decision
making. Some studies suggest that the parietal cortex is also involved in processing
risk and uncertainty (Greene, Sommerville, Nystrom, Darley, & Cohen, 2001; Ro-
gers et al., 1999). Thus, statistical analyses in all of the ROIs of the four lobes were
performed rather than only doing these on the ROIs of the PFC.
10 C. Gonzalez et al. / Journal of Economic Psychology 26 (2005) 1–20

3. Results

3.1. Behavioral results

The distribution of choices over the positively and negatively framed problems
was consistent with framing results generated in previous studies. Participants chose
the certain option more often when responding to positively framed problems and
the risky option more often in response to negatively framed problems (Fig. 2, top
panel). The percentage of risk-seeking choices was 33% under positive framing
and 59% under negative framing (v2(1) = 13.6, p < 0.01). These results were obtained
despite the within-subject design of the study, which might be expected to encourage
consistency across responses to the same problem. Most behavioral studies employ

Fig. 2. Behavioral results: number of choices and reaction time. Top panel shows the mean number of
certain and risky choices in response to positively and negatively framed problems. Bottom panel shows the
reaction time for certain and risky choices in response to positively and negatively framed problems. Error
bars represent the standard error of the mean.
 C. Gonzalez et al. / Journal of Economic Psychology 26 (2005) 1–20 11

between-subject designs to eliminate the consistency problem (Levin, Gaeth, Schrei-

ber, & Lauriola, 2002).
Behavioral studies often do not measure reaction time because such research tends
to focus on the outcomes rather than the processes involved in the framing effect.
Our analyses of reaction time revealed that participants took more time to make a
choice in negatively framed problems than in positively framed problems
(11,227 ms versus 9990 ms, respectively; F(1, 9) = 17.5, p < 0.01; Fig. 2, bottom
panel), but took approximately the same amount of time across all frames regardless
of whether the participants selected the certain or the risky alternatives
(F(1, 9) = 1.19, n.s.). The interaction between frame and risk was not significant
(F(1, 9) = 2.2, n.s.).

3.2. fMRI results

The main fMRI finding was that activation differed between risky and certain
choices, but only for the positive and not for the negative frame. The selection of ris-
ky alternatives in positive framed problems led to higher activation in frontal, pari-
etal and occipital areas than did the selection of certain alternatives. The level of
activation was very similar for risky and certain choices in the negative frames.
The effect of differential activation did not seem to be due to the frame but rather,
to the risk of the alternatives chosen. Risky alternatives produced higher activation
than certain alternatives in particular in frontal and parietal areas.
For completeness, in Table 2, we present the activation and ANOVA results for
all of the ROIs, but the most salient entries in the table are presented in bold.
Comparisons of certain and risky choices in response to positively framed prob-
lems revealed significant differences in several ROIs (right-most column in Table 2).
Higher activation levels were observed in positive–risky choices than in positive–cer-
tain choices. As shown in Table 2 this difference was significant in the RDLPFC (BA
9, middle and BA 46) and RPOSTPRECEN (BA 8) regions. In the parietal cortex,
activation levels in participants making positive–risky choices were significantly
higher in the LIPL (BA 40), right and left IPS (between BA 7 and 40), and RSPL
(BA 7) regions. We also observed significantly higher activation levels in the right
and left IES (BA 19) regions of the occipital cortex when participants made posi-
tive–risky choices. Fig. 3 shows these differences between certain and risky choices
in a graph.
The same analyses indicated non-significant differences in all ROIs (p < 0.05) for
negatively framed choices.
Fig. 4 depicts the average activation patterns. As indicated, selection of the risky
choices resulted in significantly more activation in the frontal and parietal areas com-
pared to the selection of certain choices. This difference is clear only in the positive
frame. The activation does not differ between certain and risky choices in the nega-
tive frame.
In general, activation resulting from participantsÕ selection of risky versus cer-
tain choices varied in frontal and parietal areas. The selection of risky rather than
certain choices led to higher activation levels in the right dorsolateral prefrontal
12 C. Gonzalez et al. / Journal of Economic Psychology 26 (2005) 1–20

Table 2
Sum of the change signal intensity (SSI) per ROI and condition
ROI Frame Risk Frame · Risk in
Risk positively
framed
problems
E
Positive/ Positive/ Negative/ Negative/ F(1, 9) F(1, 9) F(1, 9) F(1, 9)
certain risky certain risky
Frontal
LDLPFC 11.7 16.8 18.9 17.4 n.s. n.s. n.s. n.s.
LFEF 7.9 12.6 13.0 15.8 n.s. n.s. n.s. n.s.
LOPER 6.3 7.3 8.2 7.4 n.s. n.s. n.s. n.s.
LPOSTPRECEN 4.7 9.9 8.0 9.4 n.s. n.s. n.s. n.s.
LTRIA 1.7 1.8 1.0 1.9 n.s. n.s. n.s. n.s.
RDLPFC 12.5 29.4 18.8 22.9 n.s. 3.8* n.s. 7.2**
RFEF 5.5 11.3 4.6 5.0 n.s. n.s. n.s. n.s.
ROPER 0.7 2.5 2.9 1.1 n.s. n.s. n.s. n.s.
RPOSTPRECEN 3.7 7.7 5.2 4.0 n.s. n.s. 3.9* 6.23**
RTRIA 0.5 2.5 1.3 1.2 n.s. n.s. n.s. n.s.
SMA 4.4 4.7 5.3 5.8 n.s. n.s. n.s. n.s.
SMFP 12.6 17.6 21.3 18.6 n.s. n.s. n.s. n.s.
Sum 72.0 124.1 108.6 110.5 n.s. 3.41* n.s. n.s.
Parietal
LIPL 8.5 16.4 16.0 13.1 n.s. n.s. 5.4** 4.51*
LIPS 18.4 38.7 28.1 32.7 n.s. 4.88* 4.0* 8.71**
LSGA 0.3 2.5 1.3 0.6 n.s. n.s. n.s. n.s.
LSPL 5.2 9.5 6.7 5.4 n.s. n.s. n.s. n.s.
RIPL 8.9 13.3 13.7 10.1 n.s. n.s. n.s. n.s.
RIPS 30.7 53.6 40.8 41.4 n.s. 8.88** n.s. 15.69***
RSGA 0.0 0.7 0.5 0.4 n.s. n.s. n.s. n.s.
RSPL 10.8 21.8 13.3 13.6 n.s. n.s. n.s. 6.61**
Sum 82.9 156.5 120.5 117.2 n.s. 3.96* n.s. 10.60*
Temporal
LIT 3.3 4.0 7.0 4.7 n.s. n.s. n.s. n.s.
LT 0.9 2.1 3.9 2.9 n.s. n.s. n.s. n.s.
RIT 6.0 4.9 8.6 4.5 n.s. n.s. n.s. n.s.
RT 0.6 1.0 4.6 1.1 n.s. n.s. n.s. n.s.
Sum 10.7 12.0 24.1 13.2 n.s n.s n.s n.s
Occipital
CALC 19.0 27.2 28.2 29.0 n.s. n.s. n.s. n.s.
LIES 31.6 40.7 36.1 38.1 n.s. n.s. n.s. 4.38*
LSES 5.7 5.9 3.6 3.6 3.99* n.s. n.s. n.s.
OP 38.1 51.3 46.7 39.2 n.s. n.s. n.s. n.s.
RIES 17.4 32.7 23.6 19.4 n.s. n.s. 3.7* 6.77**
RSES 6.1 7.0 5.0 8.5 n.s. n.s. n.s. n.s.
Sum 117.7 164.9 143.2 137.7 n.s. n.s. n.s. n.s.
*
p < 0.05.
**
p < 0.01.
***
p < 0.001.
 C. Gonzalez et al. / Journal of Economic Psychology 26 (2005) 1–20 13

Fig. 3. Frame and risk interaction in specific regions of the frontal (R-DLPFC, R-POSTPRECEN),
parietal (L-IPL, L-IPS, R-IPS, R-SPL), and occipital (L-IES, R-IES) areas. Simple effect of selecting risky
choices in response to positively framed problems.

cortex (RDLPFC; BA 9 (middle) and 46) and the left and right intraparietal sul-
cus (LIPS and RIPS, between BA 7 and BA 40) as shown in Table 2. Similar
analyses led to no significant difference in response to the positive and negative
frames (p < 0.05). Fig. 5 graphs the difference in activation between risky and cer-
tain choices.
In addition to the activation described above that was measured during delibera-
tion and choice process, we also measured the activation during the reading of the
problem (excluding the alternatives). The level of activity (measured with SSI) during
reading was much lower (about 85% lower), and almost always reliably lower
(p < 0.05) than during choice (see Appendix B).

4. Discussion

The behavioral results generated in this study show that participants preferred
sure gains to risky ones and risky losses to sure ones, a common empirical result.
Individuals also took more time to make decisions framed in terms of losses rather
than in terms of gains. The fMRI results demonstrate that the cognitive effort in-
volved in choosing a guaranteed gain is considerably lower than the cognitive effort
involved in selecting a risky gain. In contrast, the cognitive effort expended in
choosing a guaranteed loss is just as high as that expended in choosing a risky loss.
14 C. Gonzalez et al. / Journal of Economic Psychology 26 (2005) 1–20

Fig. 4. Threshold fMRI average brain activation images superimposed on a structural image comparing
brain activity during the selection of certain versus risky choices in response to positively and negatively
framed problems. The Taliarach Z coordinate is 29.250. Activation in the RDLPFC and IPS regions is
higher when risky options are selected instead of certain ones in the positive frame and similarly in the
negative frame.

Fig. 5. Higher activation levels in the frontal and parietal lobes of individuals making risky rather than
certain choices. Error bars represent 95% confidence intervals based on the pooled Mse from the
corresponding ANOVA.
 C. Gonzalez et al. / Journal of Economic Psychology 26 (2005) 1–20 15

These findings support the cognitive–affective tradeoff model of the framing effect
proposed in this paper.
The cognitive effort involved in choosing sure or risky alternatives depends on
how the alternatives are framed (as gains or losses). fMRI results indicate that the
certain choice is considerably less costly (in terms of cognitive effort) than the risky
one when individuals choose among options framed as gains. It seems that the trade-
off between minimizing cognitive effort and minimizing feelings of displeasure is easy
to resolve in the positive frame. Thus, individuals execute a decision quickly and opt
more often for the certain choice.
The differences between brain activity levels in response to positive–certain and
positive–risky circumstances were found to be significant in several regions of the
frontal and parietal lobes, which suggests that cognitive processes such as working
memory and imagery were used more when selecting the risky option than when
selecting the certain option. Previous fMRI studies have found that the consideration
of large and unlikely rewards leads to more activity in the frontal and parietal cortices
of decision makers than does the consideration of small and likely rewards (Rogers
et al., 1999). Other studies have demonstrated that activity levels in the orbitofrontal
cortex of a problem solver increase with the complexity of the probabilistic demands
(Elliott et al., 1999) and the magnitude of the gains and losses under consideration
(OÕDoherty et al., 2001). Additionally, subcortical activity levels increase with the
amount of monetary rewards (Breiter et al., 2001). Because selection of the certain op-
tion required very little effort overall to calculate expected value and much less effort
than required to evaluate the risky option, participants chose the certain option more
often. In so doing, they likely were trying to avoid the cognitive cost involved in eval-
uating a gain and the emotions involved in imagining an uncertain reward.
In response to negatively framed problems, the tradeoff between minimizing cog-
nitive effort and feelings of displeasure is difficult to perform because both the certain
and the risky options involve costs. The risky option again requires the decision
maker to calculate its expected value and an emotional cost involved in the possibil-
ity of accepting a loss. However, selection of the certain option involves a higher
emotional cost by asking the decision maker to accept a guaranteed negative out-
come. Decision makersÕ imagery may influence the emotional effects they experience
due to expected outcomes. In particular, researchers have suggested that people are
more likely to imagine bad (rather than good) outcomes and how the outcomes
could have been improved (Kahneman & Miller, 1986a). Kosslyn et al. (1996) have
analyzed the emotional content of negative versus neutral pictures by evaluating
these picturesÕ effects on neural activity. They observed an increase in visual cortex
activity in response to negative imagery relative to neutral imagery. Other studies
have used the imagery of diverse emotional situations to determine the magnitude
of physiological activity and activation in the ventromedial prefrontal cortex (Bec-
hara et al., 2000). In addition, fMRI studies have shown that situations that conflict
with participantsÕ moral values result in higher frontal and parietal activation levels
(Greene et al., 2001). Thus, the conflict that results from selecting a sure alternative
that demands low cognitive effort but leads to negative outcomes leads to increased
activity in frontal and parietal cortices. More specifically, as individuals imagine the
16 C. Gonzalez et al. / Journal of Economic Psychology 26 (2005) 1–20

consequences of a guaranteed negative alternative they experience increased activity

in the parietal cortex, and as these individuals consider the conflict between their val-
ues and the consequences of the decision, they experience an emotional reaction evi-
denced by increased activity in the frontal cortex. Thus, the high emotional cost of
the negative–certain alternative and the high computational cost of the negative–ris-
ky alternative can explain our findings here of similar levels of activation irrespective
of participantsÕ choices in response to negatively framed problems. Since participants
chose the risky option more often than the certain option in response to such prob-
lems, our results suggest that people are more willing to accept a computational
rather than an emotional cost, despite the fact that both kinds of costs are similarly
demanding in terms of brain activity.
Findings reported in this paper are a good starting point to understand how cog-
nitive and affective processes integrate to determine our choices. Cognitive neurosci-
entists have aimed to determine how emotion and cognitive control are integrated
(Gray, 2001, 2004), and this study shows how both emotion a cognition play a role
in making risky choices.
There are however, many questions that arise from the results of this study. The
first question relates to the particular localization of emotional and cognitive proc-
esses involved in making choices. Gray (2004) suggest that in fact attempting to iden-
tify parts of the brain that do specialized jobs might not help obtain a complete
understanding of how parts influence each other. Emotion and cognition ‘‘intertwine
so closely that at times it is impossible to discern which is doing what’’ (Gray, 2004,
p. 46). In this study, choices among positively framed options produced different
activation levels depending on whether they were certain or risky, which we attribute
to cognitive effort needed to calculate an expected value. The similar activation for
choices among negatively framed options is however attributed to two different
causes, in the certain choice the feelings of displeasure and in the risky choice to
the cognitive effort. The question is, can we disentangle these two ‘‘causes’’ of choice?
With the current state of art in cognitive neuroscience, it seems possible to target
particular regions of the PFC and subcortical components that may reflect emo-
tional state and at the same time areas of PFC that may be specialized in cognitive
control.
A second, perhaps more difficult question to answer refers to the interplay of these
two cognitive functions (emotion and cognition) over time. Targeting for the changes
of activation over time can perhaps help us understand how emotion and cognition
interact and integrate to produce behavior.

5. Conclusion

Hundreds of empirical studies have demonstrated the framing effect in many dif-
ferent contexts (Kuhberger, 1997, 1998). Researchers performing these studies often
have treated cognition as a black box by focusing on the outcomes rather than on the
process by which decisions are made in these contexts. As a result, the subject of how
people fall prey to apparently irrational processes such as the framing effect has gone
 C. Gonzalez et al. / Journal of Economic Psychology 26 (2005) 1–20 17

largely unaddressed. Our findings offer an explanation based on the underlying

zneural processes involved in making choices in response to positively and negatively
framed problems. Activity in the frontal and parietal cortices suggests that working
memory and imagery mechanisms are involved differentially in choosing risky versus
sure options. Individuals considering potential gains display risk aversion that man-
ifests itself as significantly higher brain activity during the selection of risky versus
guaranteed responses. Individuals considering potential losses exhibit risk-seeking
behavior that manifests itself as comparably more brain activity regardless of the
selection of risky or certain prospects.

Acknowledgments

This research was supported by the Multidisciplinary University Research Initia-

tive Program (MURI), Grant number N00014-01-1-0677. Also, we would like to
thank the researchers at the Center for Cognitive Brain Imaging at Carnegie Mellon
University for their support.

Appendix A. Brain regions and Brodmann areas

The cortex is divided into four lobes: frontal, parietal, temporal and occipital.

Within each of the regions there are more sub-divisions that are often associated
with different cognitive functions. The anatomist Brodmann developed one of the re-
gional classification systems that is in use today based on the architectonic charac-
teristics of the cells in various areas. Fig. 5 shows the Brodmann areas (BAs) in a
sagital and mid-sagital view of the brain. For example, BAs 9 and 46 correspond
to what is also known as dorsolateral prefrontal cortex (DLPFC) while the BAs
45 and 47 refer to the ventrolateral prefrontal cortex. These areas often become acti-
vated in decision making tasks.
18 C. Gonzalez et al. / Journal of Economic Psychology 26 (2005) 1–20

Appendix B. SSI (sum of signal intensity) during reading and choice

ROI Reading Choice F
Frontal
LDLPFC 2.61 64.68 10.2**
LFEF 6.14 49.35 23.67***
LOPER 4.45 29.23 4.05*
LPOSTPRECEN 6.38 32.02 6.75*
LTRIA 1.50 6.42 n.s.
RDLPFC 1.47 83.56 29.99***
RFEF 1.41 26.33 12.84***
ROPER 0.63 7.21 11.92**
RPOSTPRECEN 3.43 20.58 5.28*
RTRIA 0.46 5.39 8.16*
SMA 4.46 20.31 4.28*
SMFP 3.11 70.02 15.12***
Sum 36.04 415.11 64.01***

Parietal
LIPL 9.15 54.06 15.69***
LIPS 13.49 117.93 24.0***
LSGA 1.05 4.65 n.s.
LSPL 1.55 26.83 20.23***
RIPL 2.42 45.98 17.08***
RIPS 14.79 166.53 31.44***
RSGA 0.00 1.59 3.88*
RSPL 3.20 59.40 9.61*
Sum 45.65 476.97 53.23***
 C. Gonzalez et al. / Journal of Economic Psychology 26 (2005) 1–20 19

Appendix B (continued)
ROI Reading Choice F
Temporal
LIT 3.99 19.07 6.54*
LT 5.71 9.83 n.s.
RIT 2.62 23.93 4.67*
RT 1.99 7.25 n.s.
Sum 14.30 60.07 12.42***
Occipital
CALC 33.27 103.40 24.62***
LIES 26.53 146.47 16.79***
LSES 5.12 18.72 18.70***
OP 27.51 175.25 6.43*
RIES 16.66 93.07 23.35***
RSES 4.14 26.60 26.05***
Sum 113.23 563.51 36.79***

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