Decision making process: Judgment and making decisions Flashcards
(42 cards)
Define Judgement
evaluations or estimates regarding the likelihood that offerings possess certain features or will perform in a certain manner
Estimation of likelihood
Judging how likely it is that something will occur
Define effort
how much extensive thinking/elaboration consumers put forth in making decision
goodness/badness
Evaluating the desirability of something
Define mental accounting
categorizing spending and saving decisions into ‘accounts’ mentally designated for specific consumption goals (savings account for bills, new car, groceries, entertainment)
Define emotional accounting
the intensity of positive or negative feelings associated with each mental ‘account’ for spending or saving
Anchoring and adjustment process
Individuals make an initial judgement (anchor), then make adjust judgement as new information comes
Self-positivity bias
The tendency for consumers to believe they are less likely than others to experience negative events, which can lead them to ignore warnings or risk-related messages.
Negativity bias
Giving negative information more weight
Prior brand evaluation bias
When consumers think a brand is good based on past experience, they may ignore new or important information about its actual quality
Difficulty of mental calulations bias
When price differences are easy to calculate, consumers may think the savings are bigger than they actually are
Level effect bias
$9.99, instead of $10, seen more like 9 dollars
Inert set
those they are indifferent towards
Inept set
those that are unacceptable
Consideration set
more likely to choose from
Attraction effect
occurs because the inferior brands increase the attractiveness of the
dominant brand, making the decision easier
Decision-framing
initial reference point or anchor in the decision process
Positive frame: “This beef is 75% lean.”
Negative frame: “This beef is 25% fat.”
These are mathematically the same, but the 75% lean version sounds healthier and gets better reactions
Compensatory model
A decision-making method where consumers weigh the pros and cons of each product attribute—good features can make up for bad ones, and the product with the best total score is chosen. It’s like a mental cost-benefit analysis.
Example: A consumer might dislike that a phone has poor battery life (a negative), but still choose it because it has the best camera and lowest price (positives)
Non-Compensatory model
A decision-making method where a product is rejected if it fails on any key attribute—no matter how good it is in other areas. Bad features can’t be “made up for” by good ones.
Example: If a phone doesn’t have 5G, a consumer might rule it out completely—even if it’s cheap and has a great camera.
Multiattribute model
Decision-making models where consumers evaluate multiple product attributes, weigh their importance, and make trade-offs to choose the best overall option. This can be mentally and emotionally demanding—especially when important goals like price and quality conflict
Conjunctive model
A decision-making rule where consumers set minimum acceptable levels for each important attribute. If a product fails to meet even one of those minimums, it’s immediately eliminated. (reject the bad options)
Example: A car must get at least 20 MPG and cost under $30/hour to be considered—if it fails either, it’s out.
Lexicographic model
A decision-making method where consumers rank attributes by importance and compare products one attribute at a time—starting with the most important—until one product stands out.
Example: If fuel efficiency is most important, a consumer picks the car with the best MPG. If two cars are tied, they move to the next most important factor, like price.
Disjunctive model
Disjunctive model: A decision-making rule where consumers set higher, more desirable cutoffs for key attributes, The option only needs to meet the minimum standard on ONE key attribute.
Example: A consumer wants a car that either gets at least 25 MPG or costs under $30/hour. If a car meets either of those, it stays in consideration.
Elimination-by-aspects model
A decision-making rule where consumers rank attributes by importance, set a minimum acceptable level (cutoff) for each, and eliminate options that don’t meet the cutoff—going one attribute at a time until one option remains.
Example: A consumer first looks at fuel efficiency and eliminates all cars below 25 MPG. Then they check price, eliminating those over $30/hour, and so on until only one car is left.
