Exam 1 CB

Dominated Options - inferior choice introduced to make another choice seem more attractive.

Default Option - pre-set options that people tend to stick with, even when alternative choices exist

Framing – presentation of information can lead to different decisions

Insight: The same statistics lead to different choices based on positive vs negative framing

ANCHORING – overreliance in early information

Herding – decisions based on actions of others or our previous behavior
■ Social Herding – make choices based on crowd size and volume; think viral trends
■ Self Herding – make decisions based on our own prior choices that were deemed acceptable
■ Underlying Thought – assumption that others (or old self) have good information and make choices based on good information

Zero Cost - drives us to overvalue free things

SLOW – SYSTEM 2
■ Directed Attention
■ Slow Processing – lazy
■ Effortful Processing
■ Complex Processing
■ Concentration

Fast - System 1

■ Automatic
■ Quick Processing
■ Intuitive
■ Little or no cognitive effort
■ Involuntary Processing

5 Step Model - Recognize, Search, Evaluate, Decision, Post- Decision

Perception - process in which sensations are selected, organized, and interpreted

Sensory thresholds
– Absolute threshold – lowest level of stimulation that can be detected by a sensory receptor
– Differential threshold – ability to detect changes or differences between two stimuli (j.n.d.)
– Weber’s Law – the stronger the initial stimuli, the greater the change required to get subsequent changes noticed
■ Mere exposure (Zajonc) – exposure at or right below the conscious which directs, thoughts, feelings, and behaviors
– Availability Cascade –some things are more prevalent in memory than others because of repetitive exposure
– Familiarity Effects
– Cognitive Ease and Effort

Attention – the extent to which processing activity is devoted to a given stimuli
■ Perceptual selection – we attend to only a small portion of what they are exposed to
– Weigh risk and outcomes
■ Factors influencing voluntary attention
1. Cognitive Capacity and Load Capability
2. Personal relevance, salience and experience
■ Perceptual vigilance – we are more likely to be aware of things that relate to current needs
■ Perceptual filters – influence how and what we process
■ Perceptual defense – we see what we want
3. Adaptation – the degree to which we notice a stimuli over time
4. Mood state and arousal

Involuntary Attention - result of novel stimuli

Self-enhancing – motivated by actions that build our own esteem and outcomes
Self-transcending – motivated by actions that help others

Behavioral – learning occurs as a result to some external event; routine and automatic; experiences are shaped by feedback we receive
– Classical conditioning
– Operant conditioning
Cognitive – learning occurs as a result of mental activity

Classical Conditioning when a stimulus that elicits a response is paired with another stimulus that does not initially elicit a response; repetition, proximity, contingency

Backup Planners – supply chain disruptions and stockouts led to flexibility and brand switching
2. Climate Changers – sense of individual contribution to climate led to stronger commitments to buy sustainable and engage in personal changes such as composting and walking
3. Digital Seniors – older consumers were forced online and stayed there across many consumption experiences
4. Financial Aficionados – financial literacy and wealth consciousness increased
5. Great Life Refreshers – collective reboot of values, lifestyle and personal goals shifted consumption as experience consumption continues to grow
6. Metaverse Movement – 3D world is exploding with companies and brands embracing tech at increasing rates
7. Pursuit of Preloved – thrifting and reselling is on the rise forcing brands to think differently about products
8. Rural Urbanites – city dwellers don’t want to leave, but they want green space
9. Self-love Seekers – significant focus on DEI and self-acceptance created new industries such as men’s skincare
10. Social Paradox – while consumers look for socialization, they also value their alone time