Low- vs. High-Effort Decision Making

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Low- vs. High-Effort Decision Making
High MAO
Low MAO
BELIEFS (think)
BELIEFS (think)
ATTITUDES (Judgments)
Decision Making
Decision Making
BEHAVIOR (do)
BEHAVIOR (do)
ATTITUDES (Judgments)
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Types of High-EffortDecision Rules

• Compensatory

I wanted a red car but the price is good. Ill
buy it.
Non-Compensatory
I wanted a red car so even though the price is
good, Ill keep looking.
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Can we Predict When a Certain Decision Rule will
be Used?
Problem
Person
Social Context
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Can we Predict When a Certain Decision Rule will
be Used?
PROBLEM

• Information Display
• Search by Brand vs. Attribute

• Task

• Problem size
• Time pressure

• Type

• Comparable vs.
• Noncomparable alternatives

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Can we Predict When a Certain Decision Rule will
be Used?
PERSON

• Cognitive Ability

• NFC
• Children vs. Adults

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Can we Predict When a Certain Decision Rule will
be Used?
Social Context

• Accountability

• Group decision making

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High-Effort Feeling-Based Decisions

• Products of
• hedonic
• symbolic
• aesthetic nature

• Frequently influences decision in conjunction
  with cognitive processing

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Common Bias

• Availability More accessible or vivid
  impressions are more impactful

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The Availability Heuristic

• Law of small numbers

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Low Effort Decision Making
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Why Do Consumers Make Some Decisions with Little
Thought?
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Low-Effort-Based Decision Making

• Performance-related strategies--quick decision
  based on one or a few attributes

Brand Name
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Some Common Biases
Anchoring and Adjustment
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Marketing Applications??
NO CAN LIMIT
Regularly .89
Sale .79
4 CAN LIMIT
12 CAN LIMIT
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Some Common Biases
Prospect Theory
Choose one of two options A) a 80 possibility
of winning 4,000 and a 20 risk of not winning
anything. B) a 100 possibility of winning
3,000. Which option do you choose? _______
Choose one of two options A) a 80 possibility
of losing 4,000 and a 20 risk of not losing
anything. B) a 100 possibility of losing
3,000. Which option do you choose? _______
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Pretend you are responsible for making public
policy in the face of a major flu epidemic that
was expected to kill 600 people. Decide between
two choices

• A) Policy A will save 200 people.
• B) With policy B, there is a one-third chance
  that 600 people will be saved, and two-thirds
  chance that no one will be saved.
• Which option do you choose? _______

A) Policy A will cause 400 people to die B) With
policy B, there is a one-third chance that no one
will die, and two-thirds chance that 600
will die. Which option do you choose? _______
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Marketing Applications??
Hamburger
1.50
Soda
1.25
BUNDLING
Fries
.75
1.00 each
3.00
"Save 50 on fries when you buy a hamburger and
drink"
"Save 50 on a hamburger when you buy fries and a
drink.