Hoyer - Chapter 8: Judgment and Decision Making Based on High Effort

Biases and other factors may compromise the quality of the consumer's decision and affect consumer judgment in a variety of ways:

(1) Confirmation bias; (2) Self-positivity bias; (3) Negativity bias; (4) Mood and bias; (5) Prior brand evaluations; (6) Prior experience; and (7) Difficulty of mental calculations

The relevance and importance of various decision criteria, in turn, depend on consumers':

(1) Goals; (2) Time (> construal level theory); and (3) Framing.

Consumers' decisions can be affected by the presence of a group. As each group member makes a decision in turn, he or she attempts to balance two sets of goals:

(1) Individual alone; and (2) Individual group.

Decision characteristics can affect how consumers make their choices:

(1) Information Availability; and (2) Information Format.

In a group, consumers face three types of individual-group goals:

(1) Self-presentation; (2) Minimizing regret; and (3) Information gathering

Consumer characteristics can affect how consumers make their choices:

(1) expertise; (2) mood; (3) extremeness aversion; (4) time pressure; and (5) metacognitive experiences

Compensatory model

A mental cost-benefit analysis model in which negative features can be compensated for by positive ones.

Lexicographic model

A noncompensatory model that compares brands by attributes, one at a time in order of importance.

Disjunctive model

A noncompensatory model that sets acceptable cutoffs to find options that are "good."

Conjunctive model

A noncompensatory model that sets minimum cutoffs to reject "bad" options.

Affective forecasting

A prediction of how you will feel in the future.

Noncompensatory model

A simple decision model in which negative information leads to rejection of the option.

Multiattribute expectancy-value model

A type of brandbased compensatory model.

Mental accounting

Categorizing spending and saving decisions into "accounts" mentally designated for specific consumption transactions, goals, or situations.

Attribute processing

Comparing brands, one attribute at a time.

Additive difference model

Compensatory model in which brands are compared by attribute, two brands at a time.

Information gathering

Consumers can learn more about the different choices each has made through interaction with other group members.

Self-positivity bias

Consumers can make judgments about the extent to which they or others are vulnerable to having bad things happen to them. They tend to believe that bad things are more likely to happen to other people than to themselves. As such, they might not process messages that suggest that they themselves might be vulnerable to risks.

Negativity bias

Consumers give negative information more weight than positive information when they are forming judgments.

Expertise

Consumers have more brand-based prior experience and knowledge and, as a result, tend to use brand-based decision strategies.

Self-presentation

Consumers seek to convey a certain image through the decisions they make in a group context. When consumers want to use unique choices as positive self-presentation cues or to express their individuality, the result will be variety seeking at the group level. Yet consumers are often more concerned about social norms and therefore make similar choices to blend in, resulting in uniformity at the group level.

Minimizing regret

Consumers who are risk averse and want to minimize regret will tend to make choices that are similar to those made by the rest of the group, leading to uniformity at the group level.

Confirmation bias

Consumers will focus more on judgments that confirm what they already believe and will hold those judgments with more confidence.

Prior experience

Customers learn from their previous experiences, which can be helpful but may also bias judgments during future decisions.

Brand processing

Evaluating one brand at a time.

Judgment of goodness/ badness

Evaluating the desirability of something.

Judgment

Evaluation of an object or estimate of likelihood of an outcome or event.

Cutoff level

For each attribute, the point at which a brand is rejected with a noncompensatory model.

Individual group

Goals that are achieved depending on the actions of both the individual and the group.

Individual alone

Goals that are attained by the individual's action alone.

Metacognitive experiences

How the information is processed beyond the content of the decision.

Imagery

Imagining an event in order to make a judgment.

Estimation of likelihood

Judging how likely it is that something will occur.

Alternative-based strategy

Making a noncomparable choice based on an overall evaluation.

Attribute-based strategy

Making a noncomparable choice by making abstract representations of comparable attributes.

Decision making

Making a selection among options or courses of action.

Extremeness aversion

Options that are extreme on some attributes are less attractive than those with a moderate level of those attributes.

Inept set

Options that are unacceptable when making a decision.

Inert set

Options toward which consumers are indifferent.

Attribute balancing

Picking a brand because it scores equally well on certain attributes rather than faring unequally on these attributes.

Elimination-by-aspects model

Similar to the lexicographic model but adds the notion of acceptable cutoffs.

Anchoring and adjustment process

Starting with an initial evaluation and adjusting it with additional information.

Information availability

The amount, quality, and format of the information can affect the decision-making strategy that consumers use. When a consumer has more information, the decision becomes more complex, and the consumer must use a more detailed decisionmaking strategy, such as the multiattribute choice strategy. Having more information will lead to making a better choice only up to a point, however; after that, the consumer will experience information overload.

Decision framing

The initial reference point or anchor in the decision process.

Emotional accounting

The intensity of positive or negative feelings associated with each mental "account" for saving or spending.

Affective decision-making model

The process by which consumers base their decision on feelings and emotions.

Cognitive decision-making model

The process by which consumers combine items of information about attributes to reach a decision.

Noncomparable decision

The process of making a decision about products or services from different categories.

Information format

The way information is organized or presented in the external environment.

Compromise effect

When a brand gains share because it is an intermediate rather than an extreme option.

Difficulty of mental calculations

When comparing various prices or discounts, the ease or difficulty of calculating the difference will affect consumers' judgment of the size of these differences. When consumers have little difficulty mentally calculating the difference between two or more prices or discounts, they may think the numerical differences are larger than in reality, which will bias their judgment of the choices.

Prior brand evaluations

When consumers judge a brand to be good based on their past exposure to it, they may subsequently fail to learn (and view as important) information about the brand's attributes that affect its actual quality.

Endowment effect

When ownership increases the value of an item.

Attraction effect

When the addition of an inferior brand to a consideration set increases the attractiveness of the dominant brand.

Mood and bias

Your mood can serve as the initial anchor for a judgment. Moods bias consumers' judgments by reducing their search for and attention to negative information. Mood can bias judgments by making consumers overconfident about the judgments they are reaching.