Mkt Exam 2 11.14.12 Biases

Front 1

Misapplying rules that normally work

Back 1

Enhancing evaluations by seeking more negative feedback (asking for 10 bad things rather than 2)

A misapplication of the availability heuristic (normally, easy of recall provides useful info about frequency..but here, ease of recall is not just a function of frequency, but also of question difficulty)

Front 2

Cognitive depletion can reduce impulse control

Back 2

Participants asked to memorize 2 or 7 digit number..then chose two desserts...7 digit number people chose chocolate cake because couldn't talk themselves into eating fruit

Front 3

Projection Bias

Back 3

people exaggerate the egree to which their future tastes will resemble their current tastes (weddings, tattooes)

Front 4

Mistakes due to failure of forward looking

Back 4

keep investing more and more money in business instead of just cutting ties and moving on

Front 5

MIchigan/Wisconsin example

Back 5

ASK ZAGLIA WHICH ONE IS ECONOMIC AND SUCH

Front 6

Bundling can reduce attention to sunk costs

Back 6

Who is more likely between Ernie and Bert? Ernie will go because bundling leads to more usage

Front 7

Origami example..what prove?

Back 7

People give higher value to own thing, more expensive than everyone else like me

Front 8

Consistency is good thing...leads to consistency traps

Back 8

Inconsistency viewed as undesirable personality trait..leads to consistency traps

1. Can capitalize on this desire by eliciting agreement with seemingly innocuous questions (95% asked to watch things became vigilantes at beach)

2. Can you do me a favor? as soon as say yes, like to be consistent

Front 9

Another example of consistency traps is with

Back 9

Study experiment and trap "would you be willing to participate?" and then describe to them the study

more showed up to be consisten

Front 10

Overconfidence

Back 10

more likely to happen to them or someone else--unrealistic optimism (like more likely positive events happen to them...and more likely negative events happen to other people)

Front 11

Overconfidence in predictions partly driven by ______________

Back 11

reference group neglect

Front 12

reference group neglect

Back 12

underappreciate skills of competitors in movies...certainly not enough viewers to go around

Front 13

Overconfidence also manifests in

Back 13

over precise predictions

crayons example with confidence interval---far too close of a range

Front 14

Cognitive inertia

Back 14

What is going on here..ASK ZAGLIA

Front 15

Segregate gains

Back 15

two separate products have more value
when selling a car, the time sell add ons i the time of the car purchase

infomercial hanger example

Front 16

Integrate losses

Back 16

put it in one pacakage..combine these

Integrate small losses with large gains!

Front 17

Enhanced active choice

Back 17

Highlighting the losses associated with the non-preferred alternative

I will get the flu shot this Fall to reduce my risk of getting the flu and i want to save 50 dollars

Opt in is just yes i get flu shot this fall

Active choice is I will get flu shot or not get flu shot

Enhanced is above active choice and more people choose it in this scenario

almost explore these through CO2 above lights

Front 18

Status quo bias (harmless version)

Back 18

people more likely to keep candy or mug instead of trading it

Front 19

Status quo bias (harmful)

Back 19

Stuff with auto insurance laws

PA default is better because start out ith full right to sue

Very costly is something with gold and opt in (MAYBE AS ZAGLIA)

Front 20

why status quo bias is pervasive (3 causes)

Back 20

1. loss aversion

2. regret avoidance (more regret if action leads to bad outcome than if inaction leads to bad outcome)...fender bender taking normal route home vs. FB taking diff route

3. Ownership leads to liking

Front 21

Attraction effect

Back 21

Using D as a decoy to get them to choose B (ASK ZAGLIA HOW THIS WORKS)

Front 22

Compromise effect

Back 22

Indifferent towards A and B so put D at extreme...makes B look more like compromise

like on dinner menus

Front 23

Money seems more ____ when look familiar

Back 23

seems more valuable when familiar

Front 24

Disjunction effect

Back 24

Imagine you just took an important exam (pass, did not pass, don't know but find out tomorrow)

Then offered a 5 day vacation package at a special price that expires tomorrow

People need a reason to indluge! push off if don't know if passed for sure, otherwise can't justify indulgement...like Guiness: you earned it..MAYBE ASK ZAGLIA