France and Argentina competed in the 2022 World Cup final. The following sentences both describe the outcome: “Argentina won.” “France lost.” Whether these statements have the same meaning or not depends on your idea of ‘meaning’.

The truth conditions of the two interchangeable descriptions are identical: one is true, so the other is true as well. Economics consider the preferences and beliefs of people as reality-bound, which are not influenced by the wording of their descriptions. There is another sense of ‘meaning’, in which both sentences have different meanings. The two sentences induce different associations (System 1). “Argentina won” induces thought of the actions of their national team and “France lost" induces thought of what they did that made them lose. In terms of induced associations, the sentences mean something else.

Most people do not have reality-bound preferences as System 1 is not reality-bound. Many are influenced by the formulating of a problem. For instance, a negative outcome is more acceptable if it is framed as the cost of a lottery ticket instead of lost gamble. Losses evoke stronger negative feelings than costs. The same goes for discounts and surcharges: they are economically the same thing, but emotionally not.

Neuroscientists performed an experiment in which they studied framing effects by recording the activity of several brain areas. Participants were asked to imagine receiving 50 pound. They then had to choose between a sure outcome and a gamble on a wheel. Wheels stops on white: they receive the full amount. Wheels stops on black: they get nothing. The sure outcome is a gain of 20 pound (expected value of the gamble). The same sure outcome can be framed as a ‘lose’ of 30 pound and a ‘keep’ of 20 pound. These words evoke tendencies to avoid or approach and System 1 tends to be biased in favor of the option framed as ‘keep’. All participants demonstrated framing effect: they choose the sure thing in the keep frame and accepted the gamble in the lose frame. There was a distinction among the participants though: some were very susceptible to the framing, others were reality-bound. The participants were ranked by a ‘rationality index’.

The study resulted into three significant findings:

• The amygdala (region related to emotional arousal) was most likely to be active when participants’ choices conformed to the frame. This region is accessed very quickly by emotional stimuli (System 1).

• The anterior cingulate (region related to self-control and conflict) was more active when participants did not act naturally (choosing the sure thing despite the ‘lose’-label). Resisting the suggestion by System 1 appears to cause conflict.

• The most rational participants showed enhanced activity in the frontal area that is known for combining reasoning and emotion.

This study illustrates how words that induce emotion influence our decision making.