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Consumer Behavior > Test 1 > Flashcards

Test 1 Flashcards

1
Q

Daniel Kahneman

A

2002 Nobel Prize in Economics
Pioneer in behavioral economics
An observer: hid from the Nazis
Helped determine personality in Israel Armies
Judgement and Decision Making
Prospect Theory

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2
Q

Amos Tversky

A

Mathematical psychologist
worked close with Daniel Kahneman
key figure in the discovery of systematic human cognitive bias and handling of risk.
Didn’t get the Nobel Prize because he died
Helped create prospect theory

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3
Q

Economies

A

Market fails -inefficiencies
Moneyball model - use better data
Questions over-reliances on data
Biases are a part of markets

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4
Q

Research

A

Data is not enough
Qualitative research

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5
Q

Richard Thaler

A

Nobel Prize in 2017
Behavioral economics and finance
Lazy?
Only works on the things he deems important
Misbehaving book (bird)

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6
Q

Economists dominate what?1

A

Public Policy

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7
Q

What does JDM mean?

A

Judgement and Decision Making

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8
Q

Dan Ariely

A

He was injured in an explosion
Used his pain to determine how things in the hospital could change
Israeli descent
Psychology, philosophy, business
“Irrational”
“we can predict it, it becomes a pattern.”
Tried to change way patients were taken care of
Didn’t take nurses pain into account

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9
Q

Cass Sunstein

A

Cowrote critique on Moneyball and Nudge
Lawyer

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10
Q

Katy Milkman

A

How to Change
More modern economists
Research on Judgement and decision making

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11
Q

George Lowenstein

A

Great grandson of Sigmund Freud

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12
Q

Rational Economic Model

A

Basic assumption of the idea that we are capable of making the right decisions for ourselves

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13
Q

Research Process

A

Planning, Literature Review, Data collection and analysis, discussion, reflection

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14
Q

Planning

A

What are they doing/what we will be attempting

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15
Q

literature

A

Who has already wrote about this?

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16
Q

Data Collection and Analysis

A

Researchers go out and collect data (keep data fresh in mind)

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17
Q

Discussion

A

Talk about everything

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18
Q

Reflection

A

Begin to ask the next questions - which could be turned into another hypothesis

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19
Q

Lorri’s perspective

A

-Design informs the findings
- Research builds on itself
-collect data….messy
-Make mistakes… we still learn
-cultivate curiosity

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20
Q

Utility

A

What we get from the consumption of something. subjective to the user

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21
Q

Invisible hand

A

going in without intent to get things where we want it to go

22
Q

System 1

A

automatic, outside of our awareness, immediate and fast, register sounds and locations, distinguishes between normal and surprised, scans the environment, marvelous and flawed, the hero of the story

23
Q

Examples of System 1

A

Emotions, reading, driving, carrying a conversation, things we do automatically without thinking

24
Q

Intuition

A

Most thoughts are intuitive (Gilbert), powerful and accurate, surprisingly high rate of errors

25
Q

Perception

A

Physical and Abstract

26
Q

System 1 is governed by what?

A

Habit

27
Q

System 2

A

Effortful (mental work), deliberative/inefficient/slow, awareness and thoughts, endorses system 1, lazy, correlated w intelligence, teacher S1 when to mobilize attention, limited capacity (talking on the phone and driving somewhere unfamiliar) *me going to TSWIFT

28
Q

Examples of system 2

A

Calculating a math problem, remembering a phone #, filing taxes, driving in heavy traffic/new areas, focusing on 1 voice in a crowded room, checking logic of a statement

29
Q

More system 2

A

Judgement is always explicit and intentional, rule-governed, self-monitoring, doubt, limited capacity

30
Q

Normative Theory

A

a logically consistent way to think about a problem. Expected utility theory

31
Q

Descriptive Theory

A

concerned with characterizing and explaining regularities in the choices that people are disposed to make. Prospect theory

32
Q

Thaler made the what?

A

Normative and descriptive theories

33
Q

Thaler’s mission

A

“Build descriptive economic models that describe human behavior.”

34
Q

Bernoulli’s Model

A

Utility model. Different amounts of utility based on the person

35
Q

Value Theory (Loss Aversion)

A

Look at chart in notes
=Can apply to lots of different industries and issues.

36
Q

Reference point

A

What you are acclimated to, difference from person to person

37
Q

Loss Aversion, Gains V Losses

A

We feels our losses x2 as our gains

38
Q

Risk Seeking - Losses (BEHAVIORS)

A

OG loss is more painful than subsequent losses
Take risks to get back even

39
Q

Risk Aversive - Gains (BEHAVIORS)

A

OG gain is greater than subsequent gain
Not worth risking more
Too much value on gains

40
Q

Weber Fechner Law

A

Psychology theory
JND (Just noticeable difference)
Proportional to the magnitude of the variable
We can make changes and people don’t notice them

41
Q

Assertions

A

-Humans rarely choose/understand the value of things in absolute terms
-most people don’t know what they want unless they see it in context
-thinking is different and sometimes unpleasant
-Move towards smaller circles…boost our relative happiness

42
Q

Decoys

A

Distraction to nudge you to a certain behavior -Economists newspaper examples
Less desirable version of something

43
Q

Purpose of decoys?

A

Production/firms are doing this to shift attention to what they want us to buy
Move consumers toward high level of profitability

44
Q

Economists Paper Example

A

Decoy is less desirable (Internet v news paper v bundle)

45
Q

Other Decoy examples

A

Rome v Paris v Rome without Breakfast
Pen Discount V Suit Discount
Visual illusions (circles)

46
Q

Implications in retail

A

Restaurant Meals
-ppl don’t want to choose most expensive or cheap meal, so put highest price on top with target meal right below
-TV Models, Middle $$ will sell the most
-Used cars

47
Q

Implications in Direct Sales

A

Home sales, car sales, insurance sales

48
Q

Implications for Public Policy

A

Salaries for CEOs, Transparency in pay

49
Q

Loss Aversion

A

Comparison sets up a “loss” for us. Rome V Rome w/o breakfast

50
Q

System 1 and 2

A

Middle $ wine is an automatic buy, intuitive, auto reaction, system 2 can check the choice

Consumer Behavior (4 decks)

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