Consumer decision-making: choice heuristics

Psychology A2 · Consumer Psychology. The idea in plain words, the rules to remember, the mistake to avoid and a worked example, written and checked by Mega Lecture.

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The idea

A heuristic is a mental shortcut: a simple rule that gives a quick decision with little effort. Heuristics often work well, but they can bias choices, and retailers use them.

Five are named in the syllabus: availability, representativeness, recognition, take-the-best and anchoring. Anchoring is the most used at the point of purchase. A number on a sign becomes the starting point, and shoppers adjust too little away from it.

Wansink et al. (1998) showed this with multiple unit pricing, purchase limits and suggestive selling. Del Campo et al. (2016) asked whether a person's decision-making style affects which heuristics they use.

Rules to remember

Availability: judging by how easily examples come to mind.
Representativeness: judging by how well something matches a typical example or stereotype.
Recognition: choosing the option you have heard of over one you have not.
Take-the-best: comparing options on the most important cue first and stopping at the first cue that separates them.
Anchoring: a first number sets a reference point, and later estimates stay close to it.
Wansink et al. (1998): multiple unit prices ('3 for ...'), purchase limits ('limit of 12 per person') and suggestive selling ('buy 18 for your freezer') all raised the quantity bought; explained by anchoring and adjustment.
Del Campo et al. (2016): compared people's decision-making styles with the heuristics they used when choosing a product, in two countries; style was related to heuristic use, but the links were not strong or the same everywhere.

Common mistake

Mixing up recognition and availability. Recognition is choosing a known name over an unknown one; availability is judging how common or likely something is from the examples you can easily recall.

Worked example

A shop sells soap at the same price in two weeks. In week 1 the sign reads 'Limit of 10 per customer'. In week 2 there is no limit. In which week will the average shopper buy more, and why?

Without a limit, shoppers start from their usual quantity, perhaps one or two.
The number 10 acts as an anchor, a high starting point.
Shoppers adjust downwards from 10 but not far enough.
Wansink et al. (1998) found that purchase limits raised the amount bought.

Answer: Week 1: the limit works as an anchor, so shoppers buy more than they would with no number shown.

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