Why is "Confusing the decision PROCESS with the TYPES of decision" a common mistake in Consumer Decision Making?

Why it happens: Both describe deciding. How to avoid it: The process is the five-stage sequence; the types (extended/limited/routine/impulse) describe how much effort goes into it. Source: 9990 Paper 3 mark schemes

Why is "Using cognitive dissonance for the wrong stage" a common mistake in Consumer Decision Making?

Why it happens: It's a general theory. How to avoid it: Apply it specifically to the POST-PURCHASE stage (buyer's remorse and how it's reduced).

Why is "Stating choice overload as an always-true law" a common mistake in Consumer Decision Making?

Why it happens: The jam study is memorable. How to avoid it: The effect is context-dependent and doesn't always replicate — present it as a tendency, not a universal.

Why is "Confusing satisficing with maximising" a common mistake in Consumer Decision Making?

Why it happens: Both involve choosing. How to avoid it: Satisficing = first 'good enough' option; maximising = searching for the best. Satisficing reflects bounded rationality.

Why is "Evaluating without the named debate" a common mistake in Consumer Decision Making?

Why it happens: Generic evaluation habit. How to avoid it: Tie points to the named debate (free will–determinism, application) to reach the top band on Paper 3.

Cambridge International A Levels Psychology (9990)

Consumer Decision Making

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Detailed Study Notes

Detailed notes on Consumer Psychology (A Level) for Cambridge International A Levels Psychology, covering key concepts, explanations, examples, and exam-focused revision points.

Consumer Decision Making (Consumer Psychology) — Cambridge A Level Psychology 9990 Study Notes (2024-2026)

How consumers actually decide what to buy. This note builds the background (rational vs real decision-making), then drills decision models (utility, satisficing, prospect theory), the decision-making process, heuristics and biases, choice overload, and post-purchase dissonance — with the evaluation that scores on Paper 3.

At a glance

Big question: are consumers rational? Classic models say yes; real behaviour shows we use shortcuts and are biased.
Utility theory: the 'rational economic' view — consumers weigh costs/benefits to maximise utility (satisfaction).
Satisficing (Simon): with limited time/info (bounded rationality), we pick the first 'good enough' option, not the best.
Prospect theory (Kahneman & Tversky): decisions under risk are shaped by losses looming larger than gains (loss aversion) and framing.
Decision types: extended (big/risky), limited, routine/habitual, and impulse buying.
The process: problem recognition → information search → evaluation of alternatives → purchase → post-purchase evaluation.
Heuristics & biases: anchoring, availability — fast but error-prone shortcuts.
Post-purchase: cognitive dissonance (Festinger) → buyer's remorse; choice overload reduces satisfaction.

What you’ll learn

Mapped to the Cambridge International A Level 9990 syllabus (2024-2026).

Distinguish rational (utility) from bounded/heuristic models of consumer decision-making.
Describe and evaluate satisficing (Simon) and prospect theory (Kahneman & Tversky).
Describe the stages of the consumer decision-making process and types of decision.
Explain heuristics, biases and choice overload in consumer choice.
Explain and evaluate post-purchase cognitive dissonance, and relate to issues & debates.

Rational vs real decision-making (background substance)

Classic economics assumes rational, utility-maximising consumers; psychology shows we are boundedly rational and use heuristics.

The central debate in this topic: how rational are consumers?

The rational (economic) assumption. Traditional economics models the consumer as a rational agent who has full information, weighs all options, and chooses the one that maximises utility (overall satisfaction/value for money). This is the basis of utility theory.

Why it breaks down. In reality, consumers have limited time, information and mental capacity — what Herbert Simon called bounded rationality. We cannot evaluate every option, so we use shortcuts (heuristics) and are influenced by emotion, framing and context. This is the foundation of behavioural economics.

Two consequences:

We often satisfice (accept 'good enough') rather than maximise.
We show systematic biases (e.g. loss aversion, anchoring) that a purely rational model can't explain.

Why this matters. This rational-vs-real tension runs through the whole topic and is the perfect basis for evaluation: rational models are elegant and testable but unrealistic; psychological models are realistic but harder to formalise. Marketers exploit the gap (e.g. framing, anchoring, limited-time offers).

Rational/economic view: consumers maximise utility with full information.
Reality: bounded rationality (Simon) — limited time/info/capacity.
So we use heuristics and are swayed by emotion/framing/context (behavioural economics).
Consequences: we satisfice (not maximise) and show systematic biases.
Rational models = elegant but unrealistic; psychological models = realistic but messier.

Models of decision-making — utility, satisficing, prospect theory

Utility (rational), satisficing (good enough under bounded rationality), and prospect theory (loss aversion + framing).

Utility theory (rational/economic). Consumers calculate the expected utility of each option (benefit minus cost) and choose the maximum. It assumes full information and consistent preferences.

Strength: clear, testable, normative (says what an ideal decision is).
Weakness: people don't behave this way — unrealistic.

Satisficing (Simon). Because of bounded rationality, consumers set a minimum acceptable standard and choose the first option that meets it ('good enough'), rather than searching for the best. Example: buying the first acceptable phone rather than comparing all phones.

Strength: realistic; saves time/effort. Weakness: may miss a better option.

Prospect theory (Kahneman & Tversky). Describes decisions under risk/uncertainty:

Loss aversion — losses loom larger than equivalent gains (losing $10 hurts more than gaining$ 10 pleases).
Reference points — outcomes judged as gains/losses relative to a reference, not absolutely.
Framing — the same choice framed as a gain vs a loss produces different decisions.
Strength: explains real biases and is well-evidenced; Weakness: descriptive rather than a simple predictive formula.

Utility theory: maximise expected utility (rational); elegant but unrealistic.
Satisficing (Simon): choose the first 'good enough' option (bounded rationality).
Prospect theory (Kahneman & Tversky): loss aversion + reference points + framing.
Loss aversion: losses loom larger than equivalent gains.
Framing: identical choices framed as gain vs loss → different decisions.

The decision-making process and types of decision

Five stages from problem recognition to post-purchase; decisions range from extended to routine and impulse.

The consumer decision-making process (five stages). A widely used model:

Problem/need recognition — realising you need or want something.
Information search — internal (memory) and external (reviews, ads, friends).
Evaluation of alternatives — comparing options on key criteria.
Purchase — the buying decision (and where to buy).
Post-purchase evaluation — satisfaction or cognitive dissonance (regret), affecting future loyalty.

Types of decision (by effort/involvement):

Extended decision-making — high involvement, expensive/risky, all five stages used (e.g. a car).
Limited decision-making — moderate effort, some comparison (e.g. choosing a restaurant).
Routine/habitual — low effort, automatic repurchase (e.g. milk).
Impulse buying — unplanned, emotion-driven, little deliberation (heavily exploited by store design).

Why it matters. Marketers target the stage and type: e.g. reviews target the information search; point-of-sale displays target impulse; loyalty schemes target post-purchase.

Process: problem recognition → information search → evaluation → purchase → post-purchase.
Extended (high involvement, e.g. car) → all stages used.
Limited (moderate) and routine/habitual (low effort, automatic).
Impulse buying = unplanned, emotional, little deliberation.
Marketing targets specific stages/types (reviews, displays, loyalty schemes).

Heuristics, biases and choice overload

Mental shortcuts (anchoring, availability) speed decisions but cause bias; too much choice reduces satisfaction.

Heuristics are mental shortcuts that make decisions faster but can cause systematic errors:

Anchoring — relying too heavily on the first number seen (e.g. a high 'original' price makes the sale price seem a bargain).
Availability — judging likelihood by how easily examples come to mind (e.g. buying after seeing a vivid ad).
Recognition / brand heuristic — choosing the familiar brand.

Choice overload (the paradox of choice). Too many options can be demotivating: people are less likely to buy and less satisfied when faced with excessive choice. The classic demonstration is the 'jam study' (Iyengar & Lepper, 2000): a display of 24 jams attracted more interest but produced far fewer purchases than a display of 6 jams.

Evaluation in brief. Heuristics research is well-evidenced and applicable (pricing, ranges), but lab studies can have lower ecological validity, choice-overload effects don't always replicate (they depend on context), and individuals differ (maximisers vs satisficers).

Heuristics = shortcuts: anchoring (first number), availability (ease of recall), recognition (familiar brand).
Anchoring: a high 'original' price makes a sale price feel like a bargain.
Choice overload: too many options → fewer purchases, less satisfaction.
Iyengar & Lepper jam study: 24 jams drew interest but 6 jams sold more.
Evaluation: + evidenced/applicable; − ecological validity, mixed replication, individual differences.

Post-purchase: cognitive dissonance and regret

After buying, mismatch between choice and doubts causes dissonance; consumers reduce it to feel satisfied.

Cognitive dissonance (Festinger). Dissonance is the uncomfortable tension felt when our actions and beliefs conflict. After an important purchase, doubts ('did I overpay?', 'was the other one better?') conflict with having bought it — producing post-purchase dissonance (buyer's remorse).

How consumers reduce dissonance:

seeking reassuring information (reading positive reviews, avoiding rivals' ads),
emphasising the good points of their choice and the flaws of rejected options,
returning the item or vowing not to buy that brand again.

What marketers do: reduce dissonance with follow-up emails, warranties, money-back guarantees and 'great choice!' messaging — increasing satisfaction and loyalty.

Evaluation in brief. Cognitive dissonance is a well-established theory with clear consumer application, but dissonance is hard to measure objectively (it's an internal state), and individual/cultural differences affect how much regret people feel.

Cognitive dissonance (Festinger) = discomfort when actions/beliefs conflict.
Post-purchase dissonance = buyer's remorse after an important purchase.
Reduced by reassuring info, emphasising the choice's good points, or returning the item.
Marketers reduce it via follow-ups, warranties, guarantees → loyalty.
Evaluation: + established/applicable; − hard to measure, individual/cultural differences.

Quick recap

Core debate: rational (utility-maximising) vs real (boundedly rational, heuristic) consumers.
Models: utility (rational), satisficing (Simon — 'good enough'), prospect theory (Kahneman & Tversky — loss aversion + framing).
Process: problem recognition → search → evaluation → purchase → post-purchase; types: extended/limited/routine/impulse.
Heuristics (anchoring, availability) speed but bias decisions; choice overload (jam study) reduces purchases.
Post-purchase: cognitive dissonance (Festinger) → buyer's remorse, reduced by reassurance/guarantees.
Evaluate: + realistic, applicable, well-evidenced; − ecological validity, mixed replication, hard-to-measure states.

Memorise this

Verbatim phrases and definitions Cambridge mark schemes credit.

Bounded rationality (Simon) → satisficing: choose the first 'good enough' option.
Prospect theory (Kahneman & Tversky): loss aversion (losses > gains) + framing effects.
Process: problem recognition → information search → evaluation → purchase → post-purchase.
Choice overload (Iyengar & Lepper jam study): 24 jams drew interest but 6 jams sold more.
Cognitive dissonance (Festinger) → post-purchase buyer's remorse, reduced by reassurance/guarantees.

How it’s examined

Examined in the Consumer Psychology option on Paper 3 (Specialist Options: Theory) — describe (a model, the process, dissonance) and evaluate/discuss with a named issue or debate (free will–determinism, reductionism, application, individual differences). On Paper 4 (Application) you may design a study (e.g. of choice overload or framing) or apply a model to a purchase scenario. Examiner guidance: use bounded rationality as the organising idea, quote the jam study, and hedge choice overload as context-dependent.

Sources: Cambridge International AS & A Level Psychology 9990 syllabus (2024-2026); Simon, H.A. — bounded rationality/satisficing; Kahneman & Tversky — prospect theory; Iyengar, S.S. & Lepper, M.R. (2000) When choice is demotivating. Journal of Personality and Social Psychology, 79(6): 995-1006 (the 'jam study'); Festinger, L. — cognitive dissonance; 9990 Learner Guide, Scheme of Work & past Paper 3/4 mark schemes. Last reviewed 2026-05-21.

Take this whole topic with you

Step-by-step worked examples — Consumer Decision Making

Step-by-step solutions to past-paper-style questions on consumer decision making, written exactly the way a tutor would explain them at the board.

Question type:

1Define satisficing (2 marks)
Getting startedIdentify & classify• models, AO1
Question
State what is meant by satisficing. (2 marks)
Step-by-step solution
1. Step 1
  Choosing the first option that is 'good enough' (meets a minimum standard).
2. Step 2
  Rather than searching for the best/optimal option (due to bounded rationality).
Answer
Choosing the first 'good enough' option rather than the optimal one (bounded rationality). (2)
Examiner tip
Linking it to bounded rationality (Simon) secures the second mark.
2Order the decision process (2 marks)
Getting startedIdentify & classify• process, AO1
Question
State the first and last stages of the consumer decision-making process. (2 marks)
Step-by-step solution
1. Step 1
  First: problem/need recognition.
2. Step 2
  Last: post-purchase evaluation.
Answer
First = problem/need recognition; last = post-purchase evaluation. (2)
Examiner tip
The five stages: problem recognition → information search → evaluation → purchase → post-purchase.
3Explain loss aversion (4 marks)
Building confidence• prospect-theory, AO2
Question
Explain loss aversion and give a consumer example. (4 marks)
Step-by-step solution
1. Step 1
  Loss aversion (prospect theory) = losses feel worse than equivalent gains feel good.
2. Step 2
  So people work harder to avoid losses than to achieve gains.
3. Step 3
  Example: a free trial — cancelling feels like 'losing' the product, so people keep it.
4. Step 4
  Or 'don't miss out' / limited-time offers, which frame not buying as a loss.
Answer
Losses loom larger than equivalent gains, so 'don't miss out' offers and free trials (cancelling = a loss) drive purchases. (4)
Examiner tip
AO2 credit comes from linking the concept to a real marketing tactic.
4Explain anchoring (4 marks)
Building confidence• heuristics, AO2
Question
Explain how the anchoring heuristic influences consumers. (4 marks)
Step-by-step solution
1. Step 1
  Anchoring = relying too heavily on the first piece of information (a number) seen.
2. Step 2
  A high 'original' price acts as an anchor.
3. Step 3
  The sale price is then judged relative to that anchor.
4. Step 4
  So the discount seems large and the deal seems good, encouraging purchase.
Answer
A high 'original' price anchors judgement, so the sale price seems a bargain by comparison — encouraging purchase. (4)
Examiner tip
Use a concrete example ('was 50, now 30') to show the anchor in action.
5Describe the decision-making process (6 marks)
Stretch• process, AO1, Paper 3
Question
Describe the stages of the consumer decision-making process. (6 marks)
Step-by-step solution
1. Step 1
  Problem/need recognition — realising you need or want something.
2. Step 2
  Information search — internal (memory) and external (reviews, ads, friends).
3. Step 3
  Evaluation of alternatives — comparing options on key criteria.
4. Step 4
  Purchase — the buying decision (what and where).
5. Step 5
  Post-purchase evaluation — satisfaction or cognitive dissonance (regret).
6. Step 6
  Post-purchase feelings affect future loyalty and word-of-mouth.
Answer
Problem recognition → information search → evaluation of alternatives → purchase → post-purchase evaluation (affecting loyalty). (6)
Examiner tip
Top band needs all five stages in order with a brief explanation of each.
6Evaluate — are consumers rational? (4 marks)
Stretch• evaluation, AO3, exam-technique
Question
Evaluate the view that consumers make rational decisions. (4 marks)
Step-by-step solution
1. Step 1
  Point. Pure rational models (utility theory) are unrealistic.
2. Step 2
  Explain. Consumers have bounded rationality — limited time, information and capacity.
3. Step 3
  Evidence (in context). They satisfice, use heuristics (anchoring) and show loss aversion, which a rational model can't explain.
4. Step 4
  Link. So decision-making is better described as boundedly rational than fully rational.
Answer
Rational utility models are unrealistic: consumers are boundedly rational — they satisfice, use heuristics and show loss aversion. (4)
Examiner tip
Use bounded rationality as the organising idea and cite specific biases as evidence.

Model Answers — Consumer Decision Making

High-scoring sample answers for consumer decision making on the Cambridge International A Level 9990 paper, with examiner-style notes mapping each response to the mark scheme and assessment objectives.

Question 1
9990 Paper 3 (describe) style6 marks
Q (6 marks). Describe two models of consumer decision-making.
Model answer
Satisficing (Simon). Because consumers have bounded rationality — limited time, information and mental capacity — they do not evaluate every option. Instead they set a minimum acceptable standard and choose the first option that meets it ('good enough'). For example, a shopper may buy the first acceptable phone rather than comparing every model.

Prospect theory (Kahneman & Tversky). This describes decisions made under risk or uncertainty. Its central idea is loss aversion: losses loom larger than equivalent gains, so people are more motivated to avoid a loss than to achieve a gain. Outcomes are judged as gains or losses relative to a reference point, and the framing of a choice (as a gain or a loss) changes the decision even when the options are objectively identical. Both models reject the idea of the perfectly rational consumer assumed by utility theory.
Why this scores
Why this scores well. Two models are accurately described with key terms (bounded rationality; loss aversion, reference points, framing) and an example, plus the link to rejecting pure rationality — strong AO1.
Question 2
9990 Paper 3 (evaluate with named debate) style10 marks
Q (10 marks). Evaluate models of consumer decision-making, including a discussion of free will and determinism.
Model answer
Strength 1 — realistic and well-evidenced. Psychological models (satisficing, prospect theory, heuristics) are supported by strong research (e.g. Kahneman & Tversky's work on loss aversion) and describe how people actually decide, unlike the unrealistic rational utility model — a major strength.

Strength 2 — application. The models are highly applicable: marketers use anchoring ('was 50, now 30'), framing and loss aversion ('don't miss out', free trials) to influence consumers, showing real-world value.

Weakness 1 — free will vs determinism (named debate). These accounts are quite deterministic: they imply consumers are driven by biases and shortcuts rather than choosing freely, and marketers can exploit these biases. Yet consumers can sometimes override biases (e.g. comparing prices deliberately), so a soft-determinist view — biases shape but do not wholly determine choice — fits best.

Weakness 2 — measurement and generalisability. Many findings come from lab studies with lower ecological validity than real shopping; some effects (e.g. choice overload) don't always replicate; and individual differences (maximisers vs satisficers) and culture affect decisions.

Conclusion. Psychological models are realistic, well-evidenced and applicable, which makes them strong, but their determinism (and exploitability) and the limits of lab evidence mean consumer choice is best seen as boundedly rational and softly determined rather than either fully rational or fully controlled.
Why this scores
Why this reaches the top band. Two strengths and two weaknesses, the named debate (free will–determinism) developed with a soft-determinist resolution, plus measurement/generalisability and a reasoned conclusion (AO3).
Question 3
9990 Paper 3 (describe) style6 marks
Q (6 marks). Describe post-purchase cognitive dissonance and how consumers reduce it.
Model answer
Cognitive dissonance (Festinger) is the uncomfortable tension felt when a person's actions and beliefs conflict. After an important purchase, doubts — 'did I overpay?', 'was the other option better?' — conflict with having made the purchase, producing post-purchase dissonance, commonly called buyer's remorse.

Consumers reduce this discomfort in several ways: by seeking reassuring information (reading positive reviews of their choice and avoiding rivals' adverts), by emphasising the good points of what they bought and the flaws of the rejected options, or, if dissonance is strong, by returning the item or vowing not to buy that brand again. Marketers help reduce dissonance with follow-up emails, warranties, money-back guarantees and reassuring 'great choice!' messaging, which increases satisfaction and brand loyalty.
Why this scores
Why this scores well. It defines dissonance (Festinger), applies it to post-purchase regret, and gives both consumer and marketer dissonance-reduction strategies — accurate, applied AO1.
Question 4
9990 Paper 4 (application) style8 marks
Q (8 marks). A psychologist wants to test whether offering fewer product choices increases sales. Suggest how this could be investigated, with reference to research methods.
Model answer
A suitable design is a field experiment (replicating the logic of the jam study) with an independent variable of the number of options displayed (e.g. 6 vs 24) and a dependent variable of sales, operationalised as the proportion of shoppers who buy and/or units sold per shopper who stops at the display.

The two displays would be set up in the same store on matched days/times (standardisation), with the products and prices identical so only the number of options varies. Comparing purchase rates tests for choice overload. The real setting gives high ecological validity and objective sales data with no demand characteristics. Ethical points: shoppers cannot easily consent, so use anonymous, aggregated data and avoid harm. Weaknesses include little control over who shops each day and possible confounds (weather, promotions), so the study should be repeated and the conditions counterbalanced across days. Because choice-overload effects do not always replicate, measuring across several sites would test how robust the effect is.
Why this scores
Why this scores well. It operationalises the IV/DV, controls confounds, uses objective data, addresses ethics, and shows awareness that the effect is not always replicated — strong Paper 4 application.

Key Definitions and Keywords — Consumer Decision Making

Definitions to memorise and the exact keywords mark schemes credit for consumer decision making answers — sharpened from recent examiner reports for the 2026 Cambridge International A Level 9990 sitting.

Utility theory
Examiner keyword
The rational/economic model: consumers weigh costs and benefits to maximise utility (satisfaction).
Bounded rationality (Simon)
Examiner keyword
The idea that decision-making is limited by available time, information and mental capacity.
Satisficing
Examiner keyword
Choosing the first 'good enough' option that meets a minimum standard, rather than the optimal one.
Prospect theory (Kahneman & Tversky)
Examiner keyword
A model of decisions under risk featuring loss aversion, reference points and framing effects.
Loss aversion
Examiner keyword
Losses loom larger than equivalent gains, so people work harder to avoid losses than to achieve gains.
Framing effect
Examiner keyword
The same choice produces different decisions depending on whether it is presented as a gain or a loss.
Anchoring
Examiner keyword
Relying too heavily on the first piece of information (e.g. an 'original' price) when making a judgement.
Choice overload
Examiner keyword
Too many options reduce the likelihood of purchase and satisfaction (the 'jam study').
Cognitive dissonance (Festinger)
Examiner keyword
Discomfort when actions and beliefs conflict; post-purchase it produces buyer's remorse.
Impulse buying
Unplanned, emotion-driven purchasing with little deliberation.

Common Mistakes and Misconceptions — Consumer Decision Making

The traps other students keep falling into on consumer decision making questions — taken from recent Cambridge International A Level 9990 examiner reports and mark schemes — and how to avoid them.

✕Confusing the decision PROCESS with the TYPES of decision
9990 Paper 3 mark schemes
Why it happens
Both describe deciding.
How to avoid it
The process is the five-stage sequence; the types (extended/limited/routine/impulse) describe how much effort goes into it.
✕Using cognitive dissonance for the wrong stage
Why it happens
It's a general theory.
How to avoid it
Apply it specifically to the POST-PURCHASE stage (buyer's remorse and how it's reduced).
✕Stating choice overload as an always-true law
Why it happens
The jam study is memorable.
How to avoid it
The effect is context-dependent and doesn't always replicate — present it as a tendency, not a universal.
✕Confusing satisficing with maximising
Why it happens
Both involve choosing.
How to avoid it
Satisficing = first 'good enough' option; maximising = searching for the best. Satisficing reflects bounded rationality.
✕Evaluating without the named debate
Why it happens
Generic evaluation habit.
How to avoid it
Tie points to the named debate (free will–determinism, application) to reach the top band on Paper 3.

Consumer Decision Making (Consumer Psychology) — Cambridge A Level Psychology 9990 Study Notes (2024-2026)

Strength 1 — realistic and well-evidenced. Psychological models (satisficing, prospect theory, heuristics) are supported by strong research (e.g. Kahneman & Tversky's work on loss aversion) and describe how people actually decide, unlike the unrealistic rational utility model — a major strength.

Strength 2 — application. The models are highly applicable: marketers use anchoring ('was 50, now 30'), framing and loss aversion ('don't miss out', free trials) to influence consumers, showing real-world value.

Weakness 1 — free will vs determinism (named debate). These accounts are quite deterministic: they imply consumers are driven by biases and shortcuts rather than choosing freely, and marketers can exploit these biases. Yet consumers can sometimes override biases (e.g. comparing prices deliberately), so a soft-determinist view — biases shape but do not wholly determine choice — fits best.

Weakness 2 — measurement and generalisability. Many findings come from lab studies with lower ecological validity than real shopping; some effects (e.g. choice overload) don't always replicate; and individual differences (maximisers vs satisficers) and culture affect decisions.

Conclusion. Psychological models are realistic, well-evidenced and applicable, which makes them strong, but their determinism (and exploitability) and the limits of lab evidence mean consumer choice is best seen as boundedly rational and softly determined rather than either fully rational or fully controlled.

Consumer Decision Making

Detailed Study Notes

At a glance

What you’ll learn

Rational vs real decision-making (background substance)

Models of decision-making — utility, satisficing, prospect theory

The decision-making process and types of decision

Heuristics, biases and choice overload

Post-purchase: cognitive dissonance and regret

Quick recap

Memorise this

How it’s examined

Take this whole topic with you

1Define satisficing (2 marks)

2Order the decision process (2 marks)

3Explain loss aversion (4 marks)

4Explain anchoring (4 marks)

5Describe the decision-making process (6 marks)

6Evaluate — are consumers rational? (4 marks)

Utility theory

Bounded rationality (Simon)

Satisficing

Prospect theory (Kahneman & Tversky)

Loss aversion

Framing effect

Anchoring

Choice overload

Cognitive dissonance (Festinger)

Impulse buying

✕Confusing the decision PROCESS with the TYPES of decision

✕Using cognitive dissonance for the wrong stage

✕Stating choice overload as an always-true law

✕Confusing satisficing with maximising

✕Evaluating without the named debate

Consumer Decision Making

Detailed Study Notes

At a glance

What you’ll learn

Rational vs real decision-making (background substance)

Models of decision-making — utility, satisficing, prospect theory

The decision-making process and types of decision

Heuristics, biases and choice overload

Post-purchase: cognitive dissonance and regret

Quick recap

Memorise this

How it’s examined

Take this whole topic with you

1Define satisficing (2 marks)

2Order the decision process (2 marks)

3Explain loss aversion (4 marks)

4Explain anchoring (4 marks)

5Describe the decision-making process (6 marks)

6Evaluate — are consumers rational? (4 marks)

Utility theory

Bounded rationality (Simon)

Satisficing

Prospect theory (Kahneman & Tversky)

Loss aversion

Framing effect

Anchoring

Choice overload

Cognitive dissonance (Festinger)

Impulse buying

✕Confusing the decision PROCESS with the TYPES of decision

✕Using cognitive dissonance for the wrong stage

✕Stating choice overload as an always-true law

✕Confusing satisficing with maximising

✕Evaluating without the named debate