Judgments

1. Judgments • Types • Likelihood • Goodness/badness • Anchoring and adjustment processes • Anchoring: Basic value against which other examples are judged (e.g., price of gasoline) • Adjustment process: Based on repeated experiences, initial values may be updated.

2. Mental Accounting • Consumers tend to see their spending as from “accounts” in a budget • The way an opportunity is categorized may affect a decision—e.g., “dining out” budget has been spent but “entertainment” budget has not • Something received as gift from a spouse may be cause of happiness even if the person would not have spent the same amount of money himself/herself. • “Emotional accounting”

3. Biases in Judgment • Confirmation bias • Self-positivity • Negativity: Negative info is viewed as more “diagnostic” and weighted more heavily • Mood induced • Prior brand evaluations and experience (discounting or rejecting of new info) • Distortions due to calculation difficulty

4. Decision Sets • Consideration set—possibilities that may be activity considered • Inept set—seen as unacceptable • Inert—seen with indifference • Attractiveness effect: Poor brands make brands in consideration set look better

5. Issues in Selecting Decision Criteria • Goals • Time point • Construal theory: More abstract judgments are made about possible future decisions; decisions about actual impending purchases tend to be based on more concrete issues • Framing

6. Compensatory vs. Non-Compensatory Decisions • Compensatory: Decision based on overall value of alternatives (good attribute can outweigh bad ones) • Non-compensatory: Absolutely must meet at least one important criterion (e.g., car must have automatic transmission)

7. Brand vs. Attribute Based Processing • Brand based: Each brand is considered as a whole to be compared against other brands • Attribute based: Attributes are generally selected in order of importance, with the most important attribute considered for each brand, followed by the consideration of less important attributes

8. Brand Based Models • Multiattribute Model (Expectancy-Value) • Conjunctive model: Each brand must meet a minimum cutoff on each attribute to remain “in the running” • Disjunctive model • Decision based on the most important variables rather than all • Consideration of both absolute minimum and “good” levels

9. Multiattribute Models of Attitudeand Judgment--Review • Attitude computed as a function of multiple attributes weighted for importance: Ab= attitude toward brand b Wi: weight of attribute I Xib: belief about brand b’s performance on attribute I • Model assumes rationality Calculations will not be required on the exam. You should know conceptually what this involves conceptually—i.e., weighing importance and intensity of feeling.

10. Attribute Based Models • Additive difference model: Brands are compared two at a time on all attributes—thus, there is some tradeoff between attributes • Lexicographic: A comparison is made based on the most important attribute, with lower importance attributes used for tie-breaking • Elimination by aspects: Brands with attributes below acceptable levels on attributes are sequentially eliminated, starting with the most important attribute

11. Decisions Based on Gains and Losses • Consumers tend to be more sensitive to perceived “losses” rather than gains • Framing effects—attractiveness of an option will be judged based on whether framed as a “gain” or “loss”

12. Other Issues in High Effort Decisions • Decision delay • Non-comparable options: Generally, the more different the alternatives, the more abstract the standards of evaluation