Behavioural Economics Flashcards
1
Q
Sunk Cost fallacy
A
having paid for or invested in something makes us reluctant to waste it
2
Q
Prospect Theory
A
Reference dependance: we evaluate gains and losses relative to some reference point
Loss aversion: losses count twice as much as gains
3
Q
Endowement effect
A
consumers hate losing something they have. Change in reference point
4
Q
Information search
A
process in which consumers scan their memory (=internal search) or their environment (=external search)
5
Q
Maximizer
A
Look for the solution that delivers the best possible answer to their problem
6
Q
Satisficer
A
You look for a good enough solution
7
Q
Heuristics
A
Mental Shortcuts to more extensive information processing. They simplify decision-making, but are not necessarily correct.
8
Q
A
9
Q
Brand Equity
A
Brand image + brand awareness
