Consumer decision-making: mistakes in decision-making

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

Kahneman describes two ways of thinking. System 1 is fast, automatic, emotional and effortless. System 2 is slow, deliberate, logical and takes effort. Most everyday buying uses System 1, which is why mistakes happen.

Choice blindness is failing to notice that the outcome you receive is not the one you chose. People then defend the 'choice' with reasons they have made up. The key study is Hall et al. (2010), on jam and tea.

Memory for adverts also fails through interference. In proactive interference old learning disrupts new learning. In retroactive interference new learning disrupts old learning.

Rules to remember

System 1: quick and intuitive, e.g. picking a familiar brand; System 2: effortful, e.g. comparing unit prices. Shleifer (2012) reviewed these ideas for economics.
Hall et al. (2010): field experiment with 180 shoppers at a tasting stall in a Swedish supermarket.
Hall procedure: shoppers chose between two jams (or two teas); a hidden double-ended jar swapped the chosen one for the rejected one; they tasted 'their choice' again and gave reasons.
Hall result: fewer than a third of all switches were detected, even for very different pairs.
Hall conclusion: people have limited insight into their own preferences, so stated reasons can be unreliable.
Proactive: old disrupts new. Retroactive: new disrupts old.
Burke and Srull (1988): laboratory experiments with magazine adverts; adverts for competing brands, or for other products of the same brand, reduced recall, both proactively and retroactively.

Common mistake

Reversing the two kinds of interference. Name it by the direction it works in: proactive works forwards (old on new), retroactive works backwards (new on old).

Worked example

Last month Omar learned the slogan of a new juice brand. This week he saw many adverts for rival juices, and now he cannot recall the first slogan. Name the type of interference and suggest how the first brand could reduce it.

The forgotten material is the old learning (last month's slogan).
The cause is newer learning (this week's rival adverts).
New disrupting old is retroactive interference.
Interference is strongest between similar items, so a distinctive advert suffers less.

Answer: Retroactive interference; the brand should make its advert clearly different from rivals' adverts.

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