Decision Making in Marketing
DM summary
Lecture 1
Question 1 = Assume you would like to subscribe to ‘Time’ magazine * internet only subscription * print only subscription * print and internet subscription
= context question * Choices are made in a context * Everything is relative , without context choices (in absolute terms) mean nothing * We compare jobs with jobs, wines with wines, lovers with lovers
Question 2 = Anchoring and adjustment
When was Atilla defeated by estimation.
Question 3 = Mental Accounting (Thaler)
Losing your movie ticket while having no receipt, will you buy one again?
Losing money = different mental account
Question 4 = Availability Heuristic
Which disease causes more deaths? (breath cancer vs respiratory infection)(car accidents vs diabetes)
Question 5a: Firm Statistics
Which group of companies has the largest total revenues?
Question 5b= conjunction fallacy
Is linda more likely to be a bank teller or a bank teller and in a feminist group(Linda is 31 year old, single, outspoken and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice, and also participated in anti-nuclear demonstration.)
Question 5 = Representative Heuristics * People answer a question about an object by considering how much the object is a prototype (representative) of the category
People judge the probability of a hypothesis by considering how much the hypothesis resembles (is representative for) available data
Prospect theory (k&T, 1979)
The theory describes the decision processes in two stages: editing and evaluation. During editing, outcomes of the decision are ordered following certain heuristic. In particular, people decide which outcomes they see as identical, set a reference point and then consider lesser outcomes as losses and greater ones as gains. In the following evaluation phase, people behave as if they would compute a
Lecture 1
Question 1 = Assume you would like to subscribe to ‘Time’ magazine * internet only subscription * print only subscription * print and internet subscription
= context question * Choices are made in a context * Everything is relative , without context choices (in absolute terms) mean nothing * We compare jobs with jobs, wines with wines, lovers with lovers
Question 2 = Anchoring and adjustment
When was Atilla defeated by estimation.
Question 3 = Mental Accounting (Thaler)
Losing your movie ticket while having no receipt, will you buy one again?
Losing money = different mental account
Question 4 = Availability Heuristic
Which disease causes more deaths? (breath cancer vs respiratory infection)(car accidents vs diabetes)
Question 5a: Firm Statistics
Which group of companies has the largest total revenues?
Question 5b= conjunction fallacy
Is linda more likely to be a bank teller or a bank teller and in a feminist group(Linda is 31 year old, single, outspoken and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice, and also participated in anti-nuclear demonstration.)
Question 5 = Representative Heuristics * People answer a question about an object by considering how much the object is a prototype (representative) of the category
People judge the probability of a hypothesis by considering how much the hypothesis resembles (is representative for) available data
Prospect theory (k&T, 1979)
The theory describes the decision processes in two stages: editing and evaluation. During editing, outcomes of the decision are ordered following certain heuristic. In particular, people decide which outcomes they see as identical, set a reference point and then consider lesser outcomes as losses and greater ones as gains. In the following evaluation phase, people behave as if they would compute a