Exam 11: Behavioral Decision Theory

When you ask a consumer to reject some alternative, he/she will probably focus selectively on negative attributes due to selective thinking.

Selectively overestimating the magnitude of the relationship between price and quality can be attenuated when consumers are motivated to consider exceptions to the relationship.

"Losses loom larger than gains." What concept explains this statement?

Explain the statement, "Losses loom larger than gains."

Selective thinking could also be called one-sided thinking.

When it comes to gains versus losses, what does the concept of loss aversion imply for marketers?

Consider the following example: Imagine that Mary is planning a vacation and has to choose between two vacation spots.Based on the phenomenon of selective thinking, if asked to reject a choice, which spot would Mary reject? Spot A average weather average beaches Medium-quality hotel medium-temperature water average nightlife Spot B lots of sunshine Gorgeous beaches and coral reefs ultra-modern hotel Very cold water very strong winds No nightlife Spot C mostly rainy rocky beaches Older hotel Very cold water very strong winds No nightlife

According to expected utility theory, people should think about uncertain events in terms of frequencies.

Consider the following example: Consumers are asked to evaluate two digital camera cards: Capacitv Distortion Factor Camera A: can hold 375 pictures .002 Camera B: can hold 400 pictures .I Camera C: can hold 400 pictures .2 Distortion factor was defmed for consumers since most consumers are unfamiliar with this attribute.(Consumers are told that distortion factor lowers the picture quality, and a lower number is better). Under comparative evaluation, consumers should prefer which brand?

The brand positivity effect is the tendency to view a product as more valuable if one owns it (vs.does not own it).

The fact that the difference between $0 and $100 seems larger than the difference between $1000 and $1,100 is due to loss aversion.

The idea that as preferences change when reference points related to those preferences change is known as what concept?

Research shows that when consumers expect to have to fill out a customer satisfaction survey, they focus mainly on positives to make themselves look good.

Which of the following statements about the framing effect is false?

Spending $100 on groceries seems like a lot of money to a poor person and like little money to a wealthy person. This statement represents what concept?

If a consumer likes pizza more than lasagna and likes lasagna more than spaghetti, then it follows that the consumer must like pizza more than spaghetti too.This example is an example of what concept?

Decision making under uncertainty where different outcomes are possible with different probabilities form the basis of:

Consider the following example: Imagine that Mary is planning a vacation and has to choose between two vacation spots.Based on the phenomenon of selective thinking, if asked to choose the best spot, which would Mary choose? Spot A average weather average beaches Medium-quality hotel medium-temperature water average nightlife Spot B lots of sunshine Gorgeous beaches and coral reefs ultra-modern hotel Very cold water very strong winds No nightlife Spot C mostly rainy rocky beaches Older hotel Very cold water very strong winds No nightlife

Excessive concern about possible future feelings of regret can lead consumers to commit:

George was examining a sweater at a department store.When he considered the color in terms of what his male friends might say, he decided he didn't like it.But then, his girlfriend walked up beside him and said he would look good in the sweater.Suddenly, the sweater was more appealing.George is experiencing: