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Low- vs. High-Effort Decision Making

Low- vs. High-Effort Decision Making. High MAO. Low MAO. BELIEFS (think). BELIEFS (think). Decision Making. ATTITUDES (Judgments). Decision Making. BEHAVIOR (do). ATTITUDES (Judgments). BEHAVIOR (do). Types of “High-Effort”Decision Rules. Compensatory.

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Low- vs. High-Effort Decision Making

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  1. Low- vs. High-Effort Decision Making High MAO Low MAO BELIEFS (think) BELIEFS (think) Decision Making ATTITUDES (Judgments) Decision Making BEHAVIOR (do) ATTITUDES (Judgments) BEHAVIOR (do)

  2. Types of “High-Effort”Decision Rules Compensatory I wanted a red car but the price is good. I’ll buy it. Non-Compensatory I wanted a red car so even though the price is good, I’ll keep looking.

  3. Can we Predict When a Certain Decision Rule will be Used? Problem Person Social Context

  4. Can we Predict When a Certain Decision Rule will be Used? PROBLEM • Information Display • Search by Brand vs. Attribute • Task • Problem size • Time pressure • Type • Comparable vs. • Noncomparable alternatives

  5. Can we Predict When a Certain Decision Rule will be Used? PERSON • Cognitive Ability • NFC • Children vs. Adults

  6. Can we Predict When a Certain Decision Rule will be Used? Social Context • Accountability • Group decision making

  7. High-Effort Feeling-Based Decisions Products of: • hedonic • symbolic • aesthetic nature • Frequently influences decision in conjunction with cognitive processing

  8. Common Bias • Availability: More accessible or vivid impressions are more impactful

  9. The Availability Heuristic • Law of small numbers

  10. Low Effort Decision Making

  11. Why Do Consumers Make Some Decisions with Little Thought?

  12. Low-Effort-Based Decision Making • Performance-related strategies--quick decision based on one or a few attributes Brand Name

  13. Some Common Biases Anchoring and Adjustment

  14. Marketing Applications?? NO CAN LIMIT Regularly .89 Sale .79 4 CAN LIMIT 12 CAN LIMIT

  15. Some Common Biases Prospect Theory Choose one of two options: A) a 80% possibility of winning $ 4,000 and a 20% risk of not winning anything. B) a 100% possibility of winning $ 3,000. Which option do you choose? _______ Choose one of two options: A) a 80% possibility of losing $ 4,000 and a 20% risk of not losing anything. B) a 100% possibility of losing $ 3,000. Which option do you choose? _______

  16. Pretend you are responsible for making public policy in the face of a major flu epidemic that was expected to kill 600 people. Decide between two choices: A) Policy A will save 200 people. B) With policy B, there is a one-third chance that 600 people will be saved, and two-thirds chance that no one will be saved. Which option do you choose? _______ A) Policy A will cause 400 people to die B) With policy B, there is a one-third chance that no one will die, and two-thirds chance that 600 will die. Which option do you choose? _______

  17. Marketing Applications?? Hamburger $1.50 Soda $1.25 BUNDLING Fries $.75 $1.00 each $3.00 "Save 50¢ on fries when you buy a hamburger and drink" "Save 50¢ on a hamburger when you buy fries and a drink.”

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