Behavioural Economics (Micro) Flashcards
What are the social factors affecting consumers behaviour
Social awareness - awareness of health risks
Social norms - changing norms of behaviour
Social pressures - peer pressures affecting demand for legal highs and other drugs
What are the economic factors affecting consumer behaviour
Emotional arousal after major incidents can affect demand for health insurance
Binge drinking and eating at time of personal insecurity
Emotional attachment for football season tickets and similar products
What is bounded rationality
Consumers opt to satisfy rather than maximise
This is done by using approximations and shopping based on rule of thumb
What are heuristics
Mental shortcuts or rule of thumb to make a quick satisfactory decision
What is habitual consumer behaviour
People prefer to carry on behaving as they always have done
Repeating choices is often automatic as it doesn’t require mental effort
What is choice of architecture
The layout of things can be laid out to influence decisions
What is an example of choice architecture
Make it more attractive or easier to take the stairs than to take the lift
What is an example of habitual behaviour
Choice of breakfast or political preference in elections
What is herd behaviour
We often make decisions based on who is around us and the choices they make
What is an example of herd behaviour
Choosing an item off a menu in a restaurant or binge drinkers going on holiday together
What is anchoring
Imprints in our mind that we use as reference points
What is an example of anchoring
Some anchors establish an average price that we can refer to when buying a products
What is priming
Behaviour cues that work subconsciously and prime is to behave in certain ways
What is an example of priming
Playing certain music in a shopping mall
What is framing
Framing a question in a different way often generates a new response
