Gaurav Jain, assistant professor of marketing, takes a look at how we make decisions.
Gaurav Jain, assistant professor of marketing at the Rensselaer Lally School of Management, examines how individuals make judgments, estimates, and decisions in the absence of complete information. Prior to earning his Ph.D. from the Tippie College of Business at the University of Iowa, Gaurav earned his bachelor’s degree in engineering and an MBA in marketing. More specifically, his research spans the fields of numerical cognition and judgment, working memory capacity, and, attention limitations. Using psycho-physical methods, such as eye tracking and facial expression analysis, Gaurav makes novel predictions about how various cognitive biases influence consumer choices. When time permits, Gaurav loves to drive and travel to various places – he has driven more than one hundred thousand miles in the last five years while travelling to more than twenty states in the United States
How Cognitive Biases Influence Consumer Choices
How do individuals, specifically consumers, make hundreds of decisions and judgments on a daily basis? Why do we choose to buy the products that we do? Over the past two decades, the field of behavioral economics has demonstrated that consumers often make choices irrationally, as they are influenced by cognitive biases.
There are several cognitive processes behind consumer behavior, processes that often result in unfair or illogical judgements and decisions. One example of this is anchoring where individuals are influenced by an initial piece of information when making a numerical judgement or decision. For example, when bidding on a product online, one may be subconsciously influenced by the starting price. That initial piece of information presented to a consumer is known as an anchor.
While the effects of anchoring have been proven many times, there is little research that looks at how an anchor leads to a biased judgement. We looked at anchoring scenarios in non-numeric domains such as the domains of haptics, sounds, and colors. So, we could surreptitiously observe the cognitive process that takes place. This could never be observed with numeric domains, as that process takes place mentally in numerical domains.
In our research, it becomes clear to us that numerical cognition, the way we represent and process numbers in our minds, shares a specific characteristic with physical cognition, the way we represent and process physical space in our minds – And that shared characteristic is the presence of landmarks.
Numerical landmarks, just like physical landmarks, demand more attention, are perceived to bigger than they are, and, more importantly, prime individuals to make a decision. So, just being exposed to a particular, completely irrelevant number may nudge you to make a decision you may not have otherwise made at all.