Psychology Chapter 8: Judgment and Decision-Making

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Questions and Answers

What is judgment?

The evaluation of an object or estimate of the likelihood of an outcome or an event.

What is one kind of judgment that is an estimation of likelihood?

Judging how likely it is that something will occur.

What do consumers evaluate when judging goodness and badness?

Their evaluation of the desirability of the offering's features.

What is mental accounting?

Categorizing spending and saving decisions into 'accounts' mentally designated for specific consumption transactions, goals, or situations. Signup and view all the answers

Which of the following is a bias in judgment processes?

Confirmation bias Signup and view all the answers

What are the five major types of decisions in high-effort situations?

<ol> <li>Deciding which brands to consider, 2. Deciding what is important to the choice, 3. Deciding what offerings to choose, 4. Deciding whether to decide now, 5. Deciding when alternatives cannot be compared.</li> </ol> Signup and view all the answers

What is the attraction effect?

When the addition of an inferior brand to a consideration set increases the attractiveness of the dominant brand. Signup and view all the answers

What factors affect the relevance and importance of various decision criteria?

Consumers' goals, timing of the decision, and how the decision is framed. Signup and view all the answers

What are the two types of decision models used when choosing a brand?

Compensatory Model and Non-compensatory Model. Signup and view all the answers

Match the cognitive decision models with their definitions:

Multi-attribute expectancy-value model = A model that evaluates based on multiple attributes. Conjunctive model = Sets minimum cutoffs for each attribute. Disjunctive model = Sets acceptable cutoffs to find good options. Additive difference model = Compares brands by attribute, two at a time. Signup and view all the answers

What does prospect theory state about losses and gains?

Losses loom larger than gains for consumers even when the two outcomes are of the same magnitude. Signup and view all the answers

What influences feelings-based decisions?

Appraisals and feelings, affective forecasts, and imagery. Signup and view all the answers

What leads to decision delay?

Perceived risk, unpleasant tasks, too many attractive choices, or uncertainty about product information. Signup and view all the answers

What are noncomparable decisions?

Choices where alternatives have different attributes, making comparisons difficult. Signup and view all the answers

What consumer characteristics affect high-effort decisions?

Expertise, mood, time pressure, extremeness aversion, and metacognitive experiences. Signup and view all the answers

What does information availability mean in high-effort decisions?

The level of details available which can complicate or simplify the decision-making process. Signup and view all the answers

How does group context affect consumer decisions?

Consumers attempt to balance individual goals with group goals in decision-making. Signup and view all the answers

Study Notes

Judgment and Decision-making

Judgment involves evaluating objects and estimating the likelihood of outcomes, serving as a fundamental input in decision-making.
Estimation of likelihood refers to assessing how probable an event is to occur.

Evaluations of Goodness and Badness

Consumers evaluate the desirability of features when forming judgments on goodness or badness.
Feelings and emotions influence these evaluations.
The anchoring and adjustment process starts with an initial evaluation, which is modified with additional information.

Mental and Emotional Accounting

Mental accounting: Categorizes spending and saving decisions into mental 'accounts' for particular transactions or goals.
Emotional accounting: Reflects the intensity of feelings associated with each 'account' affecting saving and spending behaviors.

Judgment Process Biases

Confirmation bias: Consumers prioritize judgments that validate existing beliefs with greater confidence.
Self-positivity bias: Consumers perceive negative outcomes as more likely to affect others than themselves.
Negativity bias: Negative information is given more weight than positive information during judgment formation.
Mood influences judgments, serving as an initial anchor, reducing negative information search, and enhancing overconfidence in decisions.
Prior brand evaluations: Favorable prior perceptions can hinder the recognition of relevant brand attributes impacting quality.
Mental calculation difficulty: Simplicity or complexity in calculating prices influences judgment regarding their value.

High-Effort Decision Types

Identifying brands to consider leads to three sets: inept (unacceptable), inert (indifferent), and consideration (chosen).
Decision criteria's relevance varies based on consumer goals, timing, and framing context—immediate choices focus on concrete aspects, while delayed choices consider abstract aspects.
Types of decisions include choosing among brands, identifying relevant attributes, the timing of decisions, and non-comparative evaluations.

Brand Selection Decisions

Compensatory Model: Balances negative features against positive ones.
Non-compensatory Model: Rejects options based solely on negative attributes, utilizing cutoffs for each feature.

Cognitive Models for Decision-making

Multi-attribute expectancy-value models: Evaluate products based on multiple attributes.
Conjunctive model: Establishes minimum acceptable cutoffs for attributes.
Disjunctive model: Sets acceptable cutoffs to identify good options.

Decisions on Gains and Losses

Decisions depend on motivations for seeking gains or avoiding losses.
Prospect theory: Consumers perceive losses as more significant than equivalent gains.
Endowment effect: Ownership enhances the perceived value and associated loss of an item.

Feelings-Based Decisions

Decisions are influenced by appraisals and emotional responses.
Affective forecasting: Predictions on future feelings stemming from decisions aid in choice processes.
Imagery allows consumers to visualize product consumption, incorporating emotional responses into decisions.

Decision Delay Factors

Decision delay occurs in situations perceived as risky, involving unpleasant tasks, too many choices, or uncertainty in acquiring product information.

Noncomparable Decision Strategies

Alternative-based strategy: Evaluates options overall using pros and cons.
Attribute-based strategy: Simplifies decisions by making abstract representations of comparable attributes.

Influences on High-Effort Decisions

Consumer characteristics like expertise, mood, time pressure, and extremeness aversion significantly shape decision-making.
Expertise facilitates comprehension of preferences; good mood enhances decision quality.
Time pressure leads to reliance on fewer attributes, emphasizing negative information.
Extremeness aversion favors moderate options over extreme ones.

Decision Characteristics

Availability of information can complicate or simplify decision-making processes.
High information levels lead to detailed strategies, while low or ambiguous information often favors existing brands.
Decision formats (brand vs. attribute organization) can direct consumers towards specific processing strategies.

Influence of Group Context

Group dynamics can shape individual decision-making by balancing personal and collective goals.
Self-presentation, minimizing regret, and information gathering are primary motivations within a group context affecting consumer choices.

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Description

This quiz covers key concepts from Chapter 8 on judgment and decision-making based on high effort. It includes important definitions and examples essential for understanding how consumers make judgments about likelihood and outcomes. Test your knowledge and comprehension of this critical psychological topic.