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recent_development updated - Consumer Behavior MAR 3503 Xin...

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1 Consumer Behavior MAR 3503 Xin He BA-II 308N 407-823-1329 xhe@bus.ucf.edu
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2 Recent Development in Behavioral Science Context effects Normative vs. descriptive principles Asymmetric dominance Compromise effect Joint vs. separate evaluations Loss aversion Prospect Theory Improvement to strength vs. improvement to weakness
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3 Introduction to Context Effects Normative vs. descriptive principles Normative principles How should people behave? Descriptive principles How do people actually behave? Rational choice- people are intelligent so you should be able to observe their behavior
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4 Introduction to Context Effects (cont.) Two normative principles of rational choice Regularity: You want to buy a digital camera and choose between Canon (60%) and Sony (40%). Now, a new ePix camera becomes available on the market. You have three brands to choose from: Canon, Sony, ePix. Will the addition of ePix camera increase the probability of choosing Canon or Sony? No, will decrease Independence of irrelevant alternative (IIA): Again, you start with Canon (60%) and Sony (40%). A new ePix camera becomes available. However, you are sure that you will not choose this brand. Will the addition of ePix camera affect your choice between Canon and Sony? No
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5 Introduction to Context Effects (cont.) Two normative principles of rational choice Regularity: Adding a choice alternative should not increase probability of choosing member of the original set Independence of irrelevant alternative (IIA): Adding an alternative that you do not select should not affect your choice between preexisting alternatives Any exceptions?
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6 Asymmetric Dominance Dominance: one alternative is superior to another one on at least one attribute, but inferior on none One brand can dominant another, equal or better First demonstrated by Huber, Payne, and Puto (1982)
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recent_development updated - Consumer Behavior MAR 3503 Xin...

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