BU432 Lecture Notes - Lecture 9: Sunk Costs, Loss Aversion, Far-Sightedness
Document Summary
Consumers integrate as much information as possible with what they already know about a product. Collect most valuable information first and just enough to make the decision (economics of information) Weigh pluses and minuses of each alternative (cost vs utility) With this perspective you would assume everyone would drive a toyota corolla, shop at. Cognitive learning theories: consumer decision making: the engel blackwell mimiard model, there is information input which includes stimuli which leads to memory ultimately resulting in the decision making process. Loyalty builds/becomes an advocate or complain (negative word of mouth) Limited vs extended problem solving: we tailor cognitive effort to the task at hand, limited problem solving. Information search: little search, information processed passively, in-store decision likely. Alternative evaluation: weakly held beliefs, only most prominent criteria used, alternatives perceived as basically similar, non-compensatory strategy used. Purchase: limited shopping time, may prefer self-service: extended problem solving. Information search: extensive search, information processed acquired, multiple sources consulted store visits.
