Management and Organizational Studies 3321F/G Chapter Notes - Chapter 9: Customer Switching, Mental Accounting, Bounded Rationality

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 3321F/G
• Professor: Tara Lee

Document Summary

Consumers go through a series of steps when they realize they want/need to make a purchase. These steps can be described as 1. problem recognition 2. information search 3. evaluation of alternatives 4. product choice. Consumer hyper choice: a condition where the large number of available options forces us to make repeated choices that may drain psychological energy while decreasing our abilities to make smart decisions. Traditionally consumer researchers gave approached decision makers from a rational. Perspective: calmly and carefully integrate as much info as possible with existing knowledge about a product, weigh the pros and cons of each alternative, and arrive at a satisfactory decisions. This traditional perspective relates to the economics of information approach to search process, which assumes we collect just as much data as we need to make an informed decision. Utility we form expectations of the value of additional info and continue to search to the extent that the rewards of doing so exceed the costs.