Interpretation & Memory: Schemas

Interpretation & Memory

• Stimuli go through exposure, attention, and interpretation before a response occurs

Interpretation

• Meanings are constructed based on motivation, the actual stimulus, prior knowledge (schemas), prior expectations, and context

Schemas

• Beliefs that form a mental framework, bundling knowledge about people, places, objects, and events in an organized manner
• Schemas capture how information is stored in memory
• Examples are relationship schemas, role schemas, event schemas, and group stereotypes
• Schemas interpret situations, summarize key concepts, and assist in making sense of new information
• Schemas simplify the world and help people think quickly
• Resistance to change, distortion of information, and prejudice/stereotyping are disadvantages
• People often cling to existing schemas, even when faced with contradictory information

Self Schemas

• Ideas about ourselves (correct or not) that affect behavior
• Self schemas include behaviors, personality traits, physical characteristics, and interests
• Beliefs influence task performance with strong identification in a dimension increasing the likelihood of performing well in that area

Schema Changes

• People desire cognitive equilibrium
• Cognitive equilibrium is a state of balance between individual’s mental schemas and their environment
• Assimilation and accommodation help to achieve this equilibrium

Assimilation

• Fitting new information into existing schemas

Accommodation

• Altering existing schemas or ideas as a result of new information or experiences
• New schemas may also be developed

Balance

• Assimilation incorporates information into existing schemas
• Accommodation leads to new schemas or transformation of existing ideas
• Assimilation is more common and requires less adjustment
• Accommodation is necessary for adapting to new situations
• Marketing not only uses schemas, but can also reinforce and create them
• Brands are also schemas in terms of personality, culture, and self-image
• Brand schemas can affect the perception of new offerings
• Brand fit is how consumers assess the fit between the product and the brand

Perceptual Confirmation

• People interpret information to confirm existing beliefs or expectations, even if the evidence does not fully support it
• People can be biased during organization and construction process
• What people see/hear depends on what they expect

Expectations

• Expectations shape experiences
• For example, preferences for beer with vinegar added varied based on whether people were told before or after tasting

Anchoring and Adjusting

• Anchors are initial, often irrelevant starting points for estimations
• The process involves starting with an initial point and adjusting it
• Affects estimations because people do not adjust enough

Suggestive Advertising

• Suggesting a number makes people more likely to buy more items

Framing

• People are more sensitive to losses compared to gains

Choice Architecture

• Refers to the design of choice environments that influences choices by changing the context
• There is no neutral architecture, as it is impossible to avoid influencing choices
• Simplifying strategies are more influential for complex choices

Good Choice Environment

• Should have fewer alternatives to avoid overwhelming consumers
• Choice overload happens when consumers are indecisive, unhappy, or unable to make a decision
• People worry about regret, suffer paralysis, or have escalated expectations due to excess of choices

Reducing Complexity

• This increases consumer confidence and reduces information processing
• Categories and simplifying attributes also help consumers deal with information better

Dilution Effect

• Giving too much or too little relevant information can make it harder for people to make choices
• Adding lower quality items can decrease perceived value

Nudges

• Small features of the environment that attract attention and influence behavior
• Nudges alter behavior towards desirable actions without forbidding options or changing economic incentives
• Should be inexpensive to implement and avoid; help people who make mistakes while causing little harm to those who make good decisions
• Nudges are libertarian paternalism, which preserves freedom of choice
• Nudges involve manipulation without coercion and minimally invasive interventions to encourage beneficial behaviors

Criticisms

• Manipulation, paternalism, lack of transparency, and potential for abuse

Why nudge?

• For difficult problems with multiple trade-offs, low frequency choices, no feedback, and forecasting future preferences

Types of nudges

• Incentives, making information more comprehensible, defaults, providing feedback, expecting human error, and priming

Pre-commitment

• committing to a specific future action at a particular time betters motivates actions while reducing procrastination

Loss Framing

• People are more motivated to avoid losses than gain a qual rewards

Precision Engagement

• This creates personalized nudges using data and behavioral science

Presumptive Ask

• Presuming consent when asking

Attitude

• A learned, consistent overall evaluation of people, objects, advertisements, or issues
• Attitudes are complex, acquired through experiences, and predictive of behavior

Attitude components

• Affect (emotional feelings), Behavior (intentions to act), and Cognition (beliefs)

Attitude Formation

• Attitudes can be formed through affective and cognitive effects of exposure
• Exposure is often referred to as the mere exposure effect
• Mere exposure is the tendency to develop a preference for things merely because they are familiar to them
• Perceptual fluency leads to attribution of liking

Truth Effect

• Consumers believe a statement because it has been repeated a number of times
• Processing fluency leads to attribution of truth

Conditioning

• Classical conditioning occurs when a stimulus that elicits a response is paired with another stimulus that initially does not elicit a response on its own
• Form of associative learning

Terms

• UCS (unconditioned stimulus), UCR (unconditioned response), NS (neutral stimulus), CS (conditioned stimulus), CR (conditioned response)

Operant Conditioning

• Rewards and punishments for behavior
• Reward attempts to increase behavior
• Punishment attempts to decrease behavior
• An individual makes an association between a particular behavior and a consequence
• Differs from classical conditioning as individual have control over behaviors

Schedules of reinforcement--Ratio

• Reinforcement after a number of responses, whether predictable or variable

Schedules of reinforcement--Interval

• Reinforcement after a time interval, whether predictable or variable

Variable Schedules

• Variable schedules produced more consistent behavior than fixed schedules
• Unpredictability of reinforcement results in more consistent responses than predictable reinforcement

Extinction Resistance

• Persistence of behavior even when reinforcement is no longer provided
• Variable ratio schedule is more resistant to extinction than the fixed ratio schedule
• Variable interval schedule is more resistant to extinction than the fixed interval schedule

Which Works Best?

• The variable ratio schedule is the most resistant to extinction
• The next reinforcement may be one or more responses away

Real-world Examples

• Slot machines and social media due to unpredictable wins and likes

Punishment

• Positive punishment adds something bad to decrease a behavior
• Negative punishment takes away something good to decrease a behavior

Consistency Theories

• People often desire consistency across their attitudes and behavior

Cognitive Dissonance

• Mental discomfort when a person has conflicting attitudes, beliefs, or behaviors
• People have an inner drive to resolve inconsistency and hold attitudes and behaviors in harmony
• Something must change to eliminate dissonance
• People change their beliefs when they do not have a strong reason to explain their actions

Things That Occur When Dissonance Exists

• Change beliefs, change actions, or add beliefs; or, ignore conflict

Balance Theory

• Desire for balance in relationships to predict attitude change and behavior

Self-perception Theory

• People develop attitudes by observing their own behavior and inferring attitudes
• Behavior leads to attitude

Cognitive Dissonance

• Desire for consistency between attitudes and thoughts
• People change thoughts/attitudes to reduce discomfort

Relationship Between Attitudes and Behavior

• Davidson and Jaccard ( 1979) study showed that attitudes can predict behavior but only under certain conditions
• They found that general attitudes do not strongly predict behavior
• Conditions for attitude to predict behavior include if specific, attitudes are measured in close temporal proximity, attitudes are highly accessible, no constraints, and if the behavior is deliberate

Persuasion

• Involves changing a person’s cognitions, feelings, behavior, or general attitudes
• How to persuade can be different depending on whether people process information or arguments in a deep way

Elaboration Likelihood Model

• The ELM is a dual process theory that describes how attitude can change
• People can change by the central and peripheral routes

Central Route

• Uses thoughtful consideration of arguments
• Consumers are active participants in persuasion

Peripheral Route

• Deciding whether to agree with the message based on other cues besides the strength of the argument
• Consumers are passive participants in persuasion

Key Insights

• Figure out the audience and what route they use to process information
• Once know this, tailor the message accordingly to the chosen route
• People who care more about the product (high motivation) tend to carefully analyze the arguments using central processing
• People with low motivation will be persuaded by surface-level cues
• Motivation and involvement will determine whether the participant processes information more or less deeply and whether they are easily persuaded

Message Content

• Strong vs. weak arguments are a component of messaging
• Strong arguments appeal to processing
• Low vs. high numbers of reasons influence peripheral processing more

Comparative Messaging

• The message makes a direct comparison with competitors
• Comparatives are more effective attempting to steal sales from more popular brands
• Disadvantages of comparative messaging is less credibility and potential to be sued

Aspects of Sources

• In general, try to design appropriate messages
• Important factor to include is credibility and the extent to which the source is trustworthy, has expertise, or has status

Persuasion Nudges

• The 6 principles of persuasion include reciprocity, commitment, consistency, social proof, scarcity, and authority

Reciprocity in Persuasion

• A social norm of responding to a positive action with another positive action, rewarding kind actions
• Important for the consumer behavior is to give a gift
• Big ask to little asks increases feelings of obligation if the requestor did you a favor

Commitment & Consistency

• People have a strong desire to appear and be consistency with their past behaviours
• Important to elicit a commitment and expect consistency

Social Proof

• People are strongly influenced by perceived social norms on what seems correct to do
• Results from what other people are doing is more persuasive than an appeal to do good.
• Encouraging green behavior with social proof, other guests re-use their towels which encourages other hotel guests

Scarcity

• People attach more value to things that are limited in quantity
• Strategies limited supply and time limits

Authority

• People tend to obey authority figures or follow those who look like they know what they are doing

Decision Making

• Normative is how customs should choose, while descriptive describes how they actually choose

System 1 and System 2 Thinking

• System 1 is when people use intuition, while System 2 utilizes reflection

Heuristics

• System 1 (intuition) make decisions, and happens because of its a mental shortcut, intuitive cues to simplify judgements and decisions, and because it can produce errors in reasoning
• This can lead intuitive cues are salient, which causes them to dominate judgements and lead to predictable biases
• System 1 is used because it can encourage thinking that is adaptive and helps consumers to make very quick sense of complex environments in marketing is important

Biases

• Systematic errors in judgement that happen when people don't make the best or most rational decisions
• This happens because our brain shortcuts things or gets influenced by emotions or previous experiences
• A heuristic might lead one to ignore important details and make a biased decision.

Availability Heuristic

• People use their judgment by how common something is based on easily recalled examples
• Things that are easy to imagine are overestimated and things that are hard to imagine are underestimated

Representativeness Heuristic

People base their judgement on how likely, based on their mental image of that category Judgements are made based on similarity to schemas or salient examples

Remedies

• Do not ignore or make quick judgement
• Look at actual probabilities
• Ask yourself, am I judging based on facts or how something "feesl" right

Anchoring

• People use a starting value by which their judgement can be made

Confirmation bias

• Gathering information to support what is held to be true
• Gathers info selectively
• Happens in both internal and external searches

Advantage

• Helps efficiency
• Leads to reduction of cognitive dissonance