Irrational Decision making

Question 1

Social Judgment Theory

Answer 1

Self-persuasion theory. Proposes that the perception and evaluation of an individual works by comparing it with current attitudes and classify them into acceptable, neutral and unacceptable (also plays into confirmation bias)

Question 2

Consumer Culture Theory

Answer 2

Looks at social and cultural context. It investigates how social norms, lifestyle and identity influence consumption, highlights how consumer decisions are embedded in cultural and social context

Question 3

Social Influence

Answer 3

How individual’s behaviors, attitudes and preferences are shaped by their social environment (decisions can be based on peer pressure, social proof and conformity)

Question 4

Dual Entitlement Theory

Answer 4

Explains consumers’ perception of fairness in pricing, particularly during price changes but also still think firms should have the right to preserve adequate profit margins (price hikes without valid cost justification can lead to backlash)

Question 5

Behavioural Activation System in Consumer Behaviour

Answer 5

Focuses on how people react to signs of possible rewards and is connected to reward-seeking behaviour -> impulsive buying

Question 6

Embodied cognition Theory

Answer 6

Consumers perceptions and decisions are influenced by their bodily interactions and experiences. Sensory experiences can influence views towards product/brand

Question 7

Conspicuous Consumption Theory

Answer 7

Explains how people often buy luxury goods for the sole purpose of showcasing their wealth and status, but not for their practical use

Question 8

Source Credibility Theory

Answer 8

Persuasiveness of a message largely depends on credibility of the source (expertise, trustworthiness and likability)

Question 9

Social Proof Theory

Answer 9

Explains how people look to others’ behaviour to guide their own decisions (follow the crowd, trusting recommendations etc)

Question 10

Parasocial Interaction Theory

Answer 10

Describes the one-sided relationship people form with media figures. Can lead people to make decisions based on the figure’s recommendation

Question 11

Mere Exposure

Answer 11

People tend to develop a preference for something simply because they’ve been exposed to it repeatedly, for example familiarity can make them more likely to decide to buy a familiar product