MGMD02H3- Midterm Exam Guide - Comprehensive Notes for the exam ( 21 pages long!)
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Compromise effect (aka extremeness aversion: ex. three ranks of cameras (low price, middies and high) > consumers would choose the middle options although the highest priced camera functions better. Decoy effect (adding clearly inferior options increases market share of superior option: ex. when given options choose, pen or cash, most consumers would choose cash. Dominance effect (desirable attributes are overweighted: cash vs. coupons. Attributes not easily comparable are underweighted: ex. A vs. b: can"t compare on two variables > act like it"s not even there > look at one attribute that one can compare (price) > price a. B vs. c: 6min < 18min > pick b. Transitivity > one must prefer a over c > a>b>c. Rejecting: decision that one makes may depending on whether choosing or rejecting, ex. And when you are choosing, you look at the good stuff: when it comes to canceling, ppl would also choose b because there is no reason why a is worse.
