Utility theory assumes that consumers make decisions by:

• Evaluating all alternatives rationally to maximize outcomes.

• Focusing on emotional connections to products.

• Prioritizing immediate rewards over long-term gains.

• Using heuristic shortcuts.

Why is Utility Theory often criticized in consumer psychology?

• It assumes consumers lack awareness of decision-making processes.

• It overemphasizes irrational choices.

• It neglects emotional factors in decision-making.

• It requires perfect rationality, which is unrealistic.

Prospect Theory differs from Utility Theory by focusing on:

• Rational decision-making based on probabilities.

• Emotional and impulsive consumer behavior.

• Subjective value of gains and losses.

• Decision-making in group settings.

Which concept is central to Prospect Theory?

• Perfect rationality

• Satisficing

• Framing of gains and losses

• Product familiarity

Satisficing suggests that consumers:

• Make optimal decisions through rational analysis.

• Stop searching once an acceptable option is found.

• Evaluate all options to maximize benefits.

• Base decisions solely on emotional responses.

What is a characteristic of compensatory decision-making strategies?

• Using a single key attribute to make decisions.

• Allowing one strong attribute to compensate for weaker ones.

• Eliminating options based on specific cutoffs.

• Ignoring all but the most relevant attributes.

In lexicographic decision-making, consumers:

• Compare all options simultaneously.

• Focus on the most important attribute first.

• Stop searching after finding an acceptable choice.

• Use emotional reasoning to finalize decisions.

The majority of conforming dimensions strategy involves:

• Comparing products to reference points.

• Evaluating multiple attributes to select the best overall option.

• Eliminating alternatives based on cutoff values.

• Making impulsive decisions under time pressure.

Which decision-making strategy is most likely used when a consumer eliminates all cars that are not red?

• Weighted additive

• Satisficing

• Elimination by aspects

• Recognition heuristic

Jedetski et al. (2002) found that non-compensatory strategies are more common when:

• Product comparisons are clear and easy.

• Consumers have limited options to consider.

• Alternatives are numerous and comparison is difficult.

• Rational decision-making styles dominate.