8 Judgement and Decision Making based on High Effort PDF

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Chapter 8 summary of judgement and decision making based on high effort....

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8 Judgement and Decision Making based on High Effort 

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High-effort judgement processes o Judgements—evaluation of an object or estimate of likelihood of an outcome/event o Decision-making—making a selection among options or course of action o Judgements of likelihood and goodness/badness  Estimation of likelihood—judging how likely it is that something will occur  Judgements of goodness/badness—reflect our evaluation of the desirability of the offering’s features  Anchoring and adjustment process—starting w an initial evaluation and adjusting it with additional information  Imagery—multi-sensory mental representation (image) of a stimulus or an event  Focus is more in vivid attributes o Mental and Emotional Accounting  Mental accounting—categorizing spending and saving decisions into “accounts” mentally designated for specific consumption transactions, goals, or situations  EX: How we account money towards certain things (rent, vacation, etc)  Emotional accounting—intensity of positive/negative feelings associated w each mental account for saving/spending o Biases in judgement processes  Confirmation bias—focus on judgements that confirm what they already believe  Self-positivity bias—consumers make judgments about extent to which they or others are vulnerable to having bad things happen to them  Believe bad things happen to others more than themselves  Negativity bias—consumers give negative info more weight than positive info when forming judgements  Mood and bias—  Mood can serve initial anchor for judgement  Moods bias consumers’ judgements by reducing their search for and attention to negative info  Mood biases judgements by making consumers over confident about judgements reached  Prior brand evaluation  Favorable brand name blocks learning about quality-revealing attributes  Prior Experience—Customers learn from previous experiences  Difficulty of mental calculations High-effort decisions and decision-making processes o Deciding which brands to consider  Inept set—options that are unacceptable when making decisions

8 Judgement and Decision Making based on High Effort Inert set—options towards which consumers are indifferent Attraction effect—when the addition of an inferior brand to a consideration set increases the attractiveness of the dominant brand o Deciding which criteria are important to the choice  Goals  Different products/services for different goals  Goals may change during the process  Promotion-focused goals: maximize gains and positive outcomes  Prevention-focused goals: emphasize product’s effectiveness rather than their own capabilities to use it  Time  Are we buying now or later?  Framing  Decision framing—initial reference point or anchor in the decision process o Subsequent info considered in light of the frame o Is price or quantity listed first ($59 for 13 items or 13 items for $59) Deciding what brand to choose: thought based decisions o Cognitive decision-making models—process by which consumers combine items of info about attributes to reach a decision  Compensatory v non-compensatory model  Compensatory model—mental cost-benefit analysis model in which negative features can be compensated for by positive ones o EX: Chinese-made products are negative bc not made in America; compensation for good is related to price  Noncompensatory model—simple decision model in which negative info leads to rejection of the option o Require less cognitive effort  Cutoff levels—for each attribute, the point at which a brand is rejected w a non-compensatory model o Affective decision-making—process by which consumers base their decision on feelings and emotions o Decisions based on brands  Brand processing—evaluating one brand at a time  Multi-attribute expectancy-value model—brand-based compensatory model  Conjunctive model—noncompensatory model that sets minimum cutoffs to reject bad options  Disjunctive model—noncompensatory model that sets acceptable cutoffs to find options that are good  Acceptable cutoffs AND weighs most important attributes o Decisions based on product attributes  

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8 Judgement and Decision Making based on High Effort Attribute processing—comparing brands one attribute at a time Additive difference model—compensatory model in which brands are compared by attribute, two brands at a time  Lexicographic model—noncompensatory model that compares brands by attributes, one at a time in order of importance  Elimination by aspects model—similar to lexicographic model, but adds the notion of acceptable cutoffs o Decisions based on gains and losses  Prospect theory: losses loom larger than gains  Endowment effect—when ownership increases the value of an item Deciding what brand to choose: high-effort feeling-based decisions o Appraisals and Feelings  Appraisal theory: how emotions are determined by the way we think  Hedonic experience interrupted actually is enjoyed more bc v satisfied when getting to return to it o Affective forecasts and choices  Affective forecasting—prediction of how you will feel in the future  How we think we will feel as the result of a decision  How intensely we will have this feeling  How long this feeling will last o Imagery  Consumers can attempt to imagine themselves consuming the product/service  More information is okay bc it makes imaging processing easier Additional High-Effort Decisions o Decision Delay  If decision is too risky, they may delay making a decision  May delay if too many attractive choices o Decision-making when alternatives cannot be compared  Noncomparible decisions—process of making a decision about products or services from different categories  Alternative-based strategy—making a noncomparible choice based on an overall evaluation  EX: Evaluate pros and cons independently then choose  Attribute-based strategy—making a noncomparible choice by making abstract representations of comparable attributes  EX: Come up with abstractions and simplify, “fun” or “likelihood of impressing someone” What affects high-effort decisions? o Consumer characteristics  Expertise  Can articulate what they want/don’t want  Has higher consumption vocabulary  

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8 Judgement and Decision Making based on High Effort Mood  Good mood = more willing to process info o Pay more attention; positively react to attributes  Time Pressure  As time pressure increases, people try to process info faster, which doesn’t always work  Present-oriented consumers: want to improve their current wellbeing and prefer products that help them do so (relaxing vacations, entertaining books)  Future-oriented consumers: want to develop themselves and lifeenriching vacations and books)  Extremeness Aversion—options that are extreme on some attributes are less attractive than those with a moderate level of attributes  Compromise effect—when a brand gains share bc it is an intermediate rather than extreme option  Attribute balancing—picking a brand bc it scores equally well on certain attributes rather than faring unequally on these attributes  Metacognitive experiences—how the info is processed beyond the content of the decision o Characteristics of the decision  Information availability  Amount, quality, and format of info can affect decision-making  Information format  The way the info is organized and presented  Trivial Attributes  Can be the deciding factor for or against product/service o Group Context  Decisions can be affected by the presence of other ppl  Ppl try to attain goals for their individual actions and that meet group goals  Group goals  Self-presentation: consumers seek to convey certain image through decisions made in group context  Minimizing regret: make choices similar to those made by the rest of the group  Information gathering: learn though interaction w other group members  ...