9.1 & 9.3
In which theory are outcomes viewed in terms of changes from a reference point, rather than absolute values?
Prospect theory.
True/False: In the Belief Sampling Model, all factors carry equal weight during the judgement phase
FALSE -> Some factors may carry more weight!
True/False: The Fast and Frugal Heuristic involves a careful and methodical weighing of all options
FALSE -> Requires the consideration of relatively little information about alternatives → hence fast
what method attempts to improve decision-making?
weight-and-add method
What phenomenon describes our tendency to ignore the duration of an experience and focus on its peak moments?
Duration neglect
What are the four stages of the sampling process?
Comprehension
Retrieval
Judgement
Response
What is attribute conflict?
If attributes conflict, evaluating and comparing options requires more mental processing.
APARTMENT EXAMPLE = One apartment is affordable but far from work, while another is expensive but nearby
what is satisficing?
The statisficing strategy is when a person looks for an option that meets their minimum criteria or is 'good enough', instead of searching for the best possible option.
What is the Weber's Fraction?
Weber's Fraction states that people can detect a difference stimulus intensity if it changes by at least 1/30 of the original intensity.
How to proponents of the stable values view explain unreliability and instability in tastes?
By asking if the respondents have been asked the right questions
What is 'Compensatory' choice making?
Compensatory: Trade-offs where positive attributes can offset negatives
Ex. Good location can compensate for high rent
what role do context effects play in altering consumer preferences?
context effects refer to how the presence of other options influence decisions, even if those options are irrelevant
How does Coombs' "good things satiate, bad things escalate" principle differ from prospect theory's approach to negative outcomes?
Coombs' principle implies escalating negative experiences can create a single-peaked utility, while prospect theory suggests diminishing returns for both positive and negative outcomes.
What is the Anchor-Adjust Process?
Retrieval and judgment stages during the Belief Sampling Model often merge:
--> An anchor (= initial belief or memory) is adjusted by additional memories or context
Provide an example for an Alternative-Based choice
HINT: Remember the example from the presentation!
Evaluating apartments solely by rent before considering location
(Attribute-Based = Attribute is selected and several alternatives are evaluated on that attribute; then attention turns to the next attribute)
what is a desirable consequence of bounded rationality?
situations where it is impossible to specify all of the alternatives, their attributes and their consequences in advance
or
consideration of all relevant possibilities and consequences involves decision costs, which are difficult to integrate with the costs and benefits of payoffs