judgement and decision making

6 Pages
149 Views
Unlock Document

Department
Management (MGM)
Course
MGMC02H3
Professor
Bill Mc Conkey
Semester
Summer

Description
Judgment and decision-making Judgment: evaluation of an object or estimates of likelihood of an outcome or event Decision-making: making a selection among options or course of action Judgments of likelihood and goodness/badness - Estimation of likelihood: judging how likely it is that something will occur\ - Judgments of goodness/badness: evaluating the desirability of something Anchoring and adjustment - anchoring and adjustment process: starting with an initial evaluation and adjusting it with additional information - Initial value can be info or effective response available the memory o or attribute info from external environment encountered first o or consumer value and normative influence - example Starbucks is popular in Japan another coffee shop named itself Seattle coffee to have a positive brand image (anchoring) - Imagery: imagining an event in order to make a judgment o may form a positive bias o Over estimate satisfaction o Focus on vivid attributes Biases in judgment processes - confirmation bias o Focus on judgment that confirms what they believe o Ignore information that counters the judgment - self positivity bias o People believe bad things are more likely to happen to others and themselves o Not process information that suggests they might be vulnerable to risks - negativity bias o More weight on negative information than positive o Do not engage in negative bias when already committed to a brand - mood and bias o Mood served as the initial anchor for judgment o Reduce search for and attention to negative information o Want to preserve good mood - prior brand evaluations o Already judge the brand to be good fail to learn other info about actual brand quality o Favorable brand blocks learning about quality revealing product attributes High effort decisions and high effort decision-making process Deciding which parents to consider - inept set: options that are unacceptable one making the decision - Inert set: options towards which consumers are indifferent - Consideration set: top of mind brands evaluated when making a choice - Attraction effect: when adding an inferior brand to a consideration set increases attractiveness of a dominant brand Deciding which criteria are important to the choice - criterion depends on goals, timing of the decision, and framing Goals - promotion focused goal: maximize gains and positive outcomes - Prevention focused goal: risk adverse emphasize the product efficacy Time - decision is immediate choice based on low level construals (specific or concrete elements) - Decision for future criteria is more general and abstract, consider hedonic aspects of the decision Framing - decision framing: initial reference point or anchor in the decision process - Example buy a car that’s economical or to impress Deciding what brand to choose: thought-based decisions - cognitive decision-making model: process by which consumers combine items of information about attributes to reach a decision - affective decision-making model: process by which consumers based a decision on feelings and emotions - Decision-making style very across culture - Two types of cognitive model o Compensatory model: mental cost-benefit analysis model in which negative features can be compensated for by positive one o Noncompensatory model: simple decision model in which negative information leads to rejection of the option  Less cognitive effort  Cut off levels: each attribute the point at which a brand is rejected with a noncompensatory model Decision based on brands - brand processing: evaluating one brand at a time - Multiattribute expectancy value model: the type of brand based compensatory model o Theory of reasoned action (TORA) o Give more weight to attribute that is consistent with goal - conjunctive model: a noncompensatory model that sets minimum cutoffs to reject bad options o rule out unsuitable alternatives - disjunctive model: a noncompensatory model that sets acceptable cutoffs to find options that are good o based evaluations on several most important attributes Decisions based on product attributes - attribute processing: comparing brands one attribute at a time o Easier than brand processing - additive difference model: compensatory model in which brands are compared by attribute, two brands at a time - Lexicographic model: noncomepensatory model that compares brands by attributes one at a time in order of importance o One option dominate consumer will select it - elimination by aspects model: similar to lexicographic model buts adds the notion of acceptable cut off Decisions based on gains and losses - endowment effect: when ownership increase the value (or loss) of an item Deciding what brand to choose: high effort feeling-based decisions - Affective decision-making: decisions based on feelings and emotions o More satisfied o Frequently experience based Appraisals and feelings - appraisal theory: how our emotions are determined by the way we think about the situation - People or fearful see more risks Affective forecasts and choices - affective forecasting: a prediction of how you will feel in the future -
More Less

Related notes for MGMC02H3

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit