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A small company employs several people. The workers' incomes have been about average for the community. In recent months, business for the company has not increased as it had before. The owners reduce the workers' wages by 10 percent for the next year.
(N = 100: Acceptable 39% Unfair 61%): A small company employs several people. The workers have been receiving a 10 percent annual bonus each year and their total incomes have been about average for the community. In recent months, business for the company has not increased as it had before. The owners eliminate the workers' bonus for the year.
(N=98: Acceptable 80% Unfair 20%)
The percent of income change is the same in the two scenarios, why are the responses so different? Explain your answer in terms of framing effect in decision making.
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