9990 · 2.3.2
Choice heuristics flashcards
Revision flashcards for Cambridge 9990 Choice heuristics (syllabus 2.3.2). Flip, recall, then mark a real past-paper question.
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Heuristic definition?
Mental shortcut — simple rule of thumb used instead of full systematic analysis when making decisions.
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Availability heuristic?
Judge likelihood/frequency by ease of recall — vivid ads or news stories make events seem more common.
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Representativeness heuristic?
Judge product by similarity to prototype — e.g. sleek packaging = premium quality (may ignore base-rate evidence).
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Price-quality heuristic?
'You get what you pay for' — higher price assumed to mean higher quality, even without evidence.
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Brand heuristic?
Trusted brand name used as quality shortcut — reduces perceived risk in low-involvement purchases (2.3.1).
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Tversky & Kahneman link?
Heuristics are efficient but produce systematic biases — foundation for 2.3.3 decision mistakes.
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What is a choice heuristic in consumer psychology?
A mental shortcut or 'rule of thumb' that consumers use to simplify decision-making, allowing for quick judgements without extensive analysis of all available information.
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Define the availability heuristic.
A cognitive shortcut where the perceived likelihood or frequency of an event is judged by the ease with which instances of it can be brought to mind.
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Define the representativeness heuristic.
A cognitive shortcut where the likelihood of something belonging to a category is judged by how well it matches a mental prototype or stereotype of that category.
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Define the price-quality heuristic.
A consumer shortcut where the price of a product is used as the primary indicator of its quality, based on the belief that 'you get what you pay for'.
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Give a consumer example of the representativeness heuristic being exploited.
A brand designs its 'budget' range of products with plain, basic packaging to make it representative of a low-cost item, while its 'premium' range uses elegant, dark packaging to match the prototype of a luxury good.
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What is 'base rate neglect' in the context of the representativeness heuristic?
It's the error of ignoring statistical information (the 'base rate') about the frequency of an event or characteristic, in favour of a compelling but stereotypical description.
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How can the availability heuristic lead to poor financial decisions?
By making consumers overestimate the risk of rare but highly publicised product failures (e.g., a phone battery fire) and avoid a statistically reliable brand, or by making them favour a heavily advertised but overpriced product.
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Provide a numerical example of the price-quality heuristic failing.
A consumer chooses a laptop costing $1200 with a review score of 85/100 over a $900 laptop with a score of 90/100. The consumer pays $300 more for an objectively lower-quality product, assuming higher price means better quality.