Controlled behavior (decisions) Flashcards
Extensive decision making:
and strategic implications
Extensive decision making:
intensive search for information and formal integration of product features.
Reduction of options through non-compensatory decision making rules
—> Decision in the reduced set through compensatory decisions
Strategic implications:
Important to satisfy the needs of the customer as good as possible.
Positive rating in as many categories as possible is especially beneficial
Limited decision-making:
and strategic implications
Limited decision-making:
Humans do not invest in cognitive work unnecessarily
Extensive use of heuristics
Strategic implications:
Emotional advertisement —> High awareness —> Getting into Evoked Set
Concentration on peripheral arguments, which are easy to process heuristically
Routinized choice behavior:
and strategic implications
Routinized choice behavior:
Common behaviors our processed automatically without usage of cognitive capacity
Behavior follows a learned and recalled decision plan.
Strategic implications:
Low market share: attention seeking actions to break consumer routine
High market share: distractions from the routine of the consumer should be avoided
Compensatory decision:
Compensatory decision: consumer rates the average of all attributes —> bad attributes can be compensated
Non-compensatory decision:
Non-compensatory decision: consume rates the important attribute (for him) —> K.O. criteria
Decision by brand:
Decision by brand: consumer calculates a full rating for every product and compares them —> focus on whole product, usage of heuristics
Decision by attribute:
Decision by attribute: consumer creates a ranking for every attribute and decides by attributes through this ranking —> Focus on details, analytical approach
Multi-attribute-model:
Multi-attribute-model: creation of a rating, based on a combination of attributes. Comparing the ratings
Additive-distance-model:
Additive-distance-model: calculation of differences between attributes of two products. Summation of the differences. One beats the other —> complex, therefore empirically not very often.
Conjunctive-decision-model:
Conjunctive-decision-model: Setting a minimum level (K.O. criteria) for every attribute and eliminate all Products with attributes below this level. Then go on with other decision model (f.e.: Multi-attribute-model)
Disjunctive-decision-model:
Disjunctive-decision-model: Setting a desired level for attributes and select products with this or a higher level —> Then go on with other decision model (f.e.: Multi-attribute-model)
Lexicographic-decision-model:
Lexicographic-decision-model: first, sort all evaluation criteria by their importance. Then go from the important to the unimportant criteria and eliminate the bad alternatives, until there is only one alternative.
Convenience goods:
Convenience goods: frequent consumption, automatic choice, satisficing —> heuristic and automatic
Shopping goods:
Shopping goods: rare consumption, deep information processing, satisficing/maximizing, non-compensatory & by brand —> (K.O. criteria)
Speciality Goods:
Speciality Goods: Very rare consumption, long search and very deep information processing, maximizing, compensatory & by attribute —> attribute offsetting
Paradox of choice
Paradox of choice (Barry Schwartz 2004):
Maximizer: Search for perfect alternative —> frustration
Satisficer: Clear standards & criteria. As soon as there is an option fulfilling them, they take it —> Happiness
Extensive Decisions: Choice of decision rule — mood
Extensive Decisions: Choice of decision rule — mood
Positive mood: Willingness to take more risks, more heuristics & other mental shortcuts (less rational), more creative, new approaches, inaccurate check of arguments, trust in prejudices and pigeonholing —> broad mental categories
Negative mood: No willingness to take risks, detail oriented, systematic approaches, Trust in proven thinking, exact check of arguments, small mental categories
Extensive Decisions: Choice of decision rule — processing fluency
Extensive Decisions: Choice of decision rule — processing fluency
Contradictions break automatism —> think
Low processing fluency —> problematic stimulus constellation —> Exact check of information processing —> Higher possibility of extensive decision
Extensive Decisions: Irrationality
Extensive Decisions: Irrationality
Rational behavior: exact checks of arguments —> judgement
Rationalizing behavior: Decision made intuitively —> In retrospect, reasons for judgements are generated
Central concept: psychological distance
We can represent the same information differently: Concrete (very near) Abstract (far away)
Distance: chronological, spatial, social, probability
Near distance: Question about how to behave; Focus on needed steps to reach plans; concrete representation; narrow categories; specific details; focus on directly observable things; Analytical thinking
Great distance: Questions about why to behave like that; Mental simulation of the fulfilled plan; abstract representation; broad categories; focus on intangible and not directly observable aspects; High creativity.
Cancellation and focus model:
Cancellation and focus model:
Only discriminating characteristics enter into the decision between alternatives. Features that only the comparison standard possesses are particularly weighted.
It gives an extreme advantage to be the comparison standard, since every attribute goes into the decision making process
Irrelevant Alternatives:
Added irrelevant alternative gives most expensive alternative more weight.
judgmental heuristic:
judgmental heuristic: enlightened inferences.
Focus on less, but central information
Activated, if: No exact knowledge (Judgement under uncertainty); time pressure; Information-overload; little motivation
Anchoring heuristic:
Anchoring heuristic:
Some value becomes an anchor for a judgement
NEEDS: Judgement under uncertainty + Anchor is a dominant information source.
Anchoring & Adjustment
Feeling Heuristics
Feeling Heuristics
Affective mood serve as the basis for a judgement —> How satisfied are you with your life (good vs. bad weather)
—> Emotions/mood as heuristics —> FEELING AS INFORMATION
Availability heuristics (fluency)
Availability heuristics (fluency) Ease of retrieval is critical to a judgement. —> An easily accessible information is classified as important/true/known „there are many reasons to choose a bmw — can you name one?“ —> 1 POSTIVE characteristics —> association (10 positive characteristics —> very bad association)
Representativeness heuristics
Representativeness heuristics
Similarity to a common example is crucially influencing the decision. The characteristics are transferred to the other object.