Session 2 Flashcards
What is the cause of the obesity crisis: People eat more or people move less
it is probbably that people consume more callories
One twix bar extra a day can explain the obesity crisis
But what changed the person or the context
Well as the obesity crisis is quite new and arose in the last 100 years there was no time for evolution to catch up so it will probably be the context that changed
Calorie underestimatioin
People can corecttly guess caloreis of a meal up to 500 calc
After that they wil quite drastically underestimate the calories of the meal
What contexts have
Throught the years company have made snacks and food easier to consume in different ways
Boneless chicken
Jolly rancher bites
Details matter small changes can have big effects
Behavior = f(person, context)
Rational decision making steps
identify alternitives
Identify attributes
Determine importance wieght of each attribute
evaluate utility of each alternative on each attribute
Compute overall utility of each alternative
The weighted additive rule
Every alternative has attributes these attributes get a score
These atributes have weights
then you times every weight with the attribute score and add all of them the alternative with the heighets sum will be chosen
this implies
alternatives better
Independence of alternatives
Predictibally irrational decisions
MPG case
10MPG
20MPG
Replace 10MPG with 20MPG
Replace 20MPG with 50MPG
Typical result = b
Actual awnser is A
This is due to the no linear relationsship betrween miles per gallon and gallons comusmed
same is used in pricing of intenet speed and diameter of pizzas
Information framing
When asked to rate ground beef
when 25% fat vs 75% lean
better ratings when framed as lean
More alternatives is better? 401k contribution
When to much choices of funds people do not participate as much as when limted funds are offered
More alternatives is better? SKU reduction
Cutting the sku relusts in more salse compared to the non cut sku page
Independence of alternatives Iced tea example
One shop
a) 236 ml for € 3
b) 354 ml for € 4
c) 473 ml for € 5
Next shop
a) 354 ml for € 4
b) 473 ml for € 5
c) 591 ml for € 6
People choose the middle chose aka b but this means that in scenario a poeple prefer 354 over 473 while in the conde one they prefer 473 over 354 which is irrational.
This is called the comprimise effect
Compromise effect
Adding an extreme Alternative increases preference for moderate Alternative .
Equal weight heuristic
same as Weighted additive rule but all the wieghts for the attributes are kept the same
Compensatory vs. non-compensatory strategies
The weighted additive rule and the equal weight heuristic consider all
attributes and all alternatives. They are compensatory strategies. This means
that stronger performance on one attribute compensates for weaker
performance on another
Consumers will often not consider all attributes or not all alternatives. They
use non-compensatory strategies. This means that stronger performance on
one attribute may not offset weaker performance on another
