Decision Making
Decision Making
Decision Making
Set of flashcards Details
| Flashcards | 144 |
|---|---|
| Language | Deutsch |
| Category | Psychology |
| Level | University |
| Created / Updated | 17.06.2024 / 18.06.2024 |
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We distinguish four types of consumer decisions: extensive processing, impulsive, limited and habitual.
Going to migros and buying same apples every week is an example of a … decision.
habitual
Name three kinds of situations that can influence the formation of the consideration set
- memory-based choice situations
- stimulus-based choice situations
- mixed situations
name three memory-based choice situations
- based on alternatives that are available in memory (often limited number of alternatives)
- Recall of relevant alternatives at a specific moment (information likely to be incomplete)
- Depends on how information is organized, on priming and on cues
name three stimulus-based choice situations
- based on presented alternatives
- often large number of alternatives
- limited due to short-term memory & limited processing capacity
Name two aspects that lead to need recognition
- internal stimuli
- external stimuli
name the three types of needs
- functional need
- social need
- need for change
what is a "want-got gap" ?
Person feels discrepancy between current and desired state.
What are the tree types of Information Search?
- Internal search
- External search
- Ongoing search (without a discrepancy to address)
Which decisions are mainly based on an internal search, which on an external search?
- internal ("What options do I remember?"): e.g. going out for dinner --> recalling restaurants from memory
- external ("What options do I find outside?": e.g. looking up a restaurant on the internet (e.g. Google maps, Tripadvisor)
What are the implications for marketing?
If people go for external search, they have an cue in internal search
What is heuristic?
mental shortcuts/rule of thumbs. Simple rules that focus on one aspect of a complex problem ignoring the others.
What is the goal of heuristic?
The goal of heuristic is making decisions more quickly, frugally, and/or accurately.
What is rationality?
Rationality is the ability to make logical and informed decisions based on reason and evidence.
Who acts rational?
Rational economic man / Rational actor / Homo Economicus
What causes cognitive biases?
They are the result of applying heuristics in decision-making.
Why is rationality important in decision making?
Rationality is important in decision making because it helps ensure that decisions are based on sound reasoning and evidence, leading to better outcomes and minimizing the risk of errors or biases.
Name five characteristics to describe the homo economicus.
- ideal decision-maker
- complete rationality
- perfect access to information
- maximizing utility
- consistent goals
What’s the assumption of bounded rationality?
People act with limited rationality
Which are the 3 reasons for bounded rationality?
limited time, limited information and limited cognitive capacity
What is an example of bounded rationality?
People are likely to take more risks when they are happy and less likely to take risks when they are sad
Who proposed the concept of bounded rationality?
Herbert A. Simon
Gamblers Fallacy
Mistaken belief that past events influence future outcomes in independent events
Can lead to poor desicions in gambling and investing
How are the resulting errors from Heuristics called ?
Cognitive biases
What are the characteristics of habitual consumer decisions?
Habitual consumer decisions are based on stable habits and are often used to make life easier.
What are the characteristics of extensive processing consumer decisions?
They are based on high involvement and the search for information results in elaborate information processing.
What are the characteristics of impulsive consumer decisions?
Impulsive consumer decisions are spontaneous, without a lot of deliberation. They can be influenced by external stimuli and are sometimes used to regulate moods.
What are the characteristics of limited consumer decisions?
With limited consumer decisions, not all information is available and we are guided by heuristics and rules-of-thumb, often based on experience.
What is the process in the additive model?
(1) Identify alternatives
(2) Identify attributes and determine weight (importance)
(3) Rate each alternative on each attribute using a specified scale (e.g. 1 to 10)
(4) Compute overall score
(5) Compare
What are the four types of consumer decisions?
- Extensive processing
- Impulsive
- Limited
- Habitual
Name the three different factors for the model of consumer decision making.
- Input – external influences
- Process – consumer decision-making
- Output – postdecision behavior
Name the six steps in the process model of consumer decision making.
(1) Problem / need recognition
(2) Information search
(3) Evaluation of alternatives
(4) Purchase decision
(5) Post-purchase evaluation
(6) Feedback
Name the non-compensatory models
Conjunctive model and Elimination-by-aspects (EBA) heuristic
Name the objective of the non-compensatory model
Process of the elimination-by-aspects model (EBA)
- Identification of most important attribute; exclusion of all alternatives that don’t fulfill specified criterion.
- Identification of second-most important attribute; exclusion of all alternatives that don’t fulfill specified criterion.
- Identification of third-most important attribute... etc.
- Choice from the resulting reduced set of alternatives => e.g., based on the additive model, additive difference model or satisficing
What typically follows after the conjunctive model?
To which process of the model of consumer decision making belongs the non-compensatory-model
Process of the elimination-by-aspects (EBA)
Slogan “must-have or must-not-have (minimum/maximum)” fits to
Purpose of “must-have, must-not-have (minimum/maximum)”
If the option don’t meet the criterias, the option gets eliminated without a compensation with another criteria.
