The effect of probability on risk perception and risk preference in decision making

A stock market scenario was utilized to test whether the framing effect of decision could be modulated by problem´s gain and loss domain and probability level. The result indicated that the framing effect was detected for student participants but not for shareholder participants; only in gaining domain, probability level affected the framing effect of decision. The overall findings were somewhat more friendly to prospect theory than to the classical normative decision models. The theoretical and practical implications of these findings were discussed.