Judgments
• Types
– Likelihood
– Goodness/badness
MKT 450
• Anchoring and
adjustment processes
– Anchoring: Basic value
against which other
examples are judged
(e.g., price of gasoline)
– Adjustment process:
Based on repeated
experiences, initial
values may be updated.
JUDGMENT AND DECISION MAKING UNDER HIGH EFFORT
Lars Perner, Instructor
2
Mental Accounting
• Consumers tend to see their spending as from
“accounts” in a budget
– The way an opportunity is categorized may affect a
decision—e.g., “dining out” budget has been spent but
“entertainment” budget has not
– Something received as gift from a spouse may be cause
of happiness even if the person would not have spent the
same amount of money himself/herself.
• “Emotional accounting”
MKT 450
JUDGMENT AND DECISION MAKING UNDER HIGH EFFORT
Lars Perner, Instructor
3
Biases in Judgment
• Confirmation bias
• Self-positivity
• Negativity: Negative info is viewed as more
“diagnostic” and weighted more heavily
• Mood induced
• Prior brand evaluations and experience
(discounting or rejecting of new info)
• Distortions due to calculation difficulty
MKT 450
JUDGMENT AND DECISION MAKING UNDER HIGH EFFORT
Lars Perner, Instructor
4
Decision Sets
• Consideration set—possibilities that may be
activity considered
• Inept set—seen as unacceptable
• Inert—seen with indifference
– Attractiveness effect: Poor brands make brands
in consideration set look better
MKT 450
JUDGMENT AND DECISION MAKING UNDER HIGH EFFORT
Lars Perner, Instructor
5
Issues in Selecting Decision
Criteria
• Goals
• Time point
– Construal theory: More abstract judgments are
made about possible future decisions; decisions
about actual impending purchases tend to be
based on more concrete issues
• Framing
MKT 450
JUDGMENT AND DECISION MAKING UNDER HIGH EFFORT
Lars Perner, Instructor
6
Compensatory vs. NonCompensatory Decisions
• Compensatory: Decision based on
overall value of alternatives (good
attribute can outweigh bad ones)
• Non-compensatory: Absolutely must
meet at least one important criterion
(e.g., car must have automatic
transmission)
MKT 450
JUDGMENT AND DECISION MAKING UNDER HIGH EFFORT
Lars Perner, Instructor
7
Brand vs. Attribute Based
Processing
• Brand based: Each
brand is considered as
a whole to be
compared against
other brands
MKT 450
• Attribute based:
Attributes are generally
selected in order of
importance, with the
most important
attribute considered for
each brand, followed
by the consideration of
less important
attributes
JUDGMENT AND DECISION MAKING UNDER HIGH EFFORT
Lars Perner, Instructor
8
Brand Based Models
• Multiattribute Model (Expectancy-Value)
• Conjunctive model: Each brand must meet a
minimum cutoff on each attribute to remain
“in the running”
• Disjunctive model
– Decision based on the most important variables
rather than all
– Consideration of both absolute minimum and
“good” levels
MKT 450
JUDGMENT AND DECISION MAKING UNDER HIGH EFFORT
Lars Perner, Instructor
9
Multiattribute Models of Attitude
and Judgment--Review
• Attitude computed as a
function of multiple attributes
weighted for importance:
Ab  i 1WiXib
n
Ab= attitude toward brand b
Wi: weight of attribute I
Xib: belief about brand b’s
performance on attribute I
• Model assumes rationality
Calculations will not be required on the exam.
You should know conceptually what this involves
conceptually—i.e., weighing importance and
intensity of feeling.
MKT 450
JUDGMENT AND DECISION MAKING UNDER HIGH EFFORT
Lars Perner, Instructor
10
Attribute Based Models
• Additive difference model: Brands are compared
two at a time on all attributes—thus, there is some
tradeoff between attributes
• Lexicographic: A comparison is made based on
the most important attribute, with lower importance
attributes used for tie-breaking
• Elimination by aspects: Brands with attributes
below acceptable levels on attributes are
sequentially eliminated, starting with the most
important attribute
MKT 450
JUDGMENT AND DECISION MAKING UNDER HIGH EFFORT
Lars Perner, Instructor
11
Decisions Based on Gains and
Losses
• Consumers tend to be
more sensitive to
perceived “losses” rather
than gains
• Framing effects—
attractiveness of an
option will be judged
based on whether
framed as a “gain” or
“loss”
MKT 450
JUDGMENT AND DECISION MAKING UNDER HIGH EFFORT
Lars Perner, Instructor
12
Other Issues in High Effort
Decisions
• Decision delay
• Non-comparable options: Generally, the
more different the alternatives, the more
abstract the standards of evaluation
MKT 450
JUDGMENT AND DECISION MAKING UNDER HIGH EFFORT
Lars Perner, Instructor
13