WAYS IN WHICH CONSUMERS STRAY FROM

RATIONAL DECISIONS

CONSUMER

DECISIONS NOT

ALWAYS RATIONAL

THEY CAN SOMETIMES MAKE SEEMINGLY IRRATIONAL CHOICES TOO.

AVAILABILITY HEURISTIC

BASED ON THE QUICKNESS AND EASE WITH WHICH AN EXAMPLE COMES TO MIND.

A RECENT FAILURE MIGHT MAKE THEM INCLINED TO BUYING A WARRANTY IN THE FUTURE

REPRESENTATIVE HEURISTICS

PACKAGING SIMILAR BECAUSE BRANDS WANT THEM TO BE SEEN AS REPRESENTATIVE OF THE WHOLE CATEGORY

ANCHORING AND ADJUSTMENT HEURISTICS

CUSTOMERS BASE THEIR DECISION ON INITIAL JUDGEMENT AND THEN MODIFY IT ACCORDING TO

ADDITIONAL INFORMATION

FRAMING

THE MANNER IN WHICH CHOICES ARE

SEEN BY AND PRESENTED TO A

CUSTOMER

MENTAL ACCOUNTING

THE WAY CONSUMERS EVALUATE AND

CATEGORIZE FINANCIAL OUTOMES OF PURCHASES

PROSPECT THEORY

CONSUMERS FRAME THEIR DECISION ALTERNATIVES IN TERMS

OF GAINS AND LOSSES IN THE FORM OF A VALUE FUNCTION

DISCLAIMER

Created by Abhigyan Singh, NIT Allahabad, during an internship by Prof. Sameer Mathur, IIM Lucknow.