4 - Heuristics & Biases Pt I

Question 1

Judgements

Answer 1

Consumers’ estimates of liking, risk, etc

Question 2

Judgement heuristics

Answer 2

Are mental rules for making judgments
Includes:
Availability
Framing
Anchoring
Decoy

Question 3

Judgement bias

Answer 3

Gap between rational and actual judgement

Question 4

Availability heuristic

Answer 4

Information that comes to mind quickly (vivid, pictures, memorable) is important/true

eg: insurance company showing videos of car crashes vs bar graphs of car crashes
This is high availability vs low availability, which leads to higher perceived risk vs other option

Question 5

Seafood restaurant availability heuristic example

Answer 5

Fresh fish displayed on ice = greater availability = fresher perception

Question 6

Climate change availability heuristic example (actual vs ideal)

Answer 6

Photo of a glacier 10 years ago vs photo of a glacier today. Powerful ecological communication that displays actual and ideal states

Question 7

Example of availability that makes something “true”

Answer 7

Off brand cough syrup packaged to resemble known brand

Question 8

Framing heuristic

Answer 8

Negative repels more than positive attracts
eg: 25% fat is perceived worse than 75% lean

Question 9

Anchoring heuristic

Answer 9

Consumers use anchors (reference points) to make judgements
eg: starting a negotiation at a higher price will lead to a higher final price

Question 10

Decoy heuristic

Answer 10

Making the consumer compromise between options
eg: when selling two products, the more expensive option can be made more attractive by adding a third option that is even more expensive

Question 11

Judgement bias and availability

Answer 11

Higher availability will influence consumer perceptions and create judgement bias
eg: charts that display a small % of breakins may lead to consumers becoming more afraid = buying ring cameras

Question 12

Distance bias

Answer 12

People think abstractly for events that are distant in time/space, but concretely for events that are close in time/space
eg: crime in Mexico is less important versus crime next block

Question 13

Coherence bias

Answer 13

People see order in randomness
eg: Cam Thomas scoring 40 points for three games in a row does not mean his next game will be >40

Question 14

Peak-end bias

Answer 14

People prefer experiences that get better over time, and end on a high
eg: planning vacations where the last days are the most joyful/eventful leaves a stronger impression post-trip