Fast and frugal crisis management: An analysis of rule-based judgment and choice during water contamination events

Drawing on the fast and frugal research programme, this paper describes a retrospective field study of decision making during water contamination events. It characterises three heuristics employed in real-world decision making. The credibility heuristic discriminates between signals from targets and noise from distracters on the basis of the perceived trustworthiness of the message conveyor. With the precedent heuristic, the response to an unfolding event is determined by searching for past analogues (i.e. precedents) and, if found, treating the current event in the same fashion. By contrast, the facts-trump-speculation heuristic discriminates between conflicting explanations or claims according to how they rank on pre-determined hierarchies of evidence (orders of cue validities), neglecting utilities and avoiding the aggregation of competing lines of evidence. Rather than cataloguing the biases that these heuristics lead to, this paper focuses on the structural factors which shape each heuristic's ecological rationality. In doing so, the study develops ideas about how particular infrastructure systems and forms of social organisation structure the validity of cues, the accessibility of information, and the application of particular heuristics. The study also introduces the concept of safeguards to rule-based reasoning, and the idea that heuristics can be used to rationalize decisions, and deployed strategically to persuade other social actors. The over-arching claim is that the fast and frugal programme provides a powerful framework for analysing judgment and choice in organisations, and offers a bridge between psychological and political models of organisational behaviour.     

Making customer relationship decisions: Analytics v rules of thumb

This article explores how customer management decisions are made in the leading Nordic retail banks and whether these decisions are driven by mainstream analytical approaches to customer lifetime value available through the banks' CRM systems, or by rule of thumb heuristics. The results indicate that the use of managerial heuristics is surprisingly widespread and, counter-intuitively, that rule of thumb heuristic-based decision making frequently outweighs measures such as customer lifetime value with regard to customer management decisions. The implications are considerable because if successful banks are making widespread use of heuristics, managers and academics would benefit from understanding the conditions under which heuristic decision making can be more successful than an analytic approach. This understanding, in turn, may highlight a limitation of CRM systems and point to a more flexible approach to customer management decisions in which experience-based managerial heuristics modify data from formal CRM systems.     

Retail investors and financial advisors: New evidence on trust and advice taking heuristics

This paper investigates factors that influence trust and advice taking among retail investors when consulting with financial advisors and making real-world portfolio decisions. The data reveal that non-expert retail investors trust their advisors a lot. Trust formation appears to be well described by a simple heuristic that relies substantially on the advisor's communication style when deciding how much to trust and delegate investment decisions. Portfolio decisions appear to depend more on investors' perceptions about the investor–advisor relationship than on the risk and return characteristics of investments comprising the portfolio choice set. This evidence supports Pentland's (2008) “honest signals” as a more powerful mechanism underlying investor trust than standard metrics based on past performance. Trust and advice-taking heuristics can be interpreted as well adapted to the environment of the non-profit bank cooperatives in which they are observed, implying that trusting based on simple honest signals, although vulnerable to exploitation, can be interpreted as ecologically rational. Features of the investor's environment typical of non-profit cooperative banks imply that the heuristics investors use can perform rather well without requiring investment experience or financial sophistication, which most investors in our sample are well aware they lack.     

Quantitative and qualitative insights into consumers’ sustainable purchasing behaviour: a segmentation approach based on motives and heuristic cues

The present study draws on the concepts of motives and heuristics to thoroughly understand consumers’ sustainable consumption behaviour in the context of personal care products. The mixed-methods approach combines real purchasing data with in-depth qualitative data to generate insights with a high external validity. In the first section of the study, quantitative analysis is applied to actual purchasing behaviour (n = 10,772,477) to identify market trends. Three main groupings, along with specific heuristic cues, are established. In the second step, a qualitative study (n = 21) provides deeper insights into consumers’ motives and decision-making processes. By synthesising the quantitative and qualitative research findings, a segmentation approach is developed. Relevant motives and values, and corresponding specific heuristic cues are identified for each consumer segment. Analysis suggests that consumers are motivated by self-interest and environmental motives, and that they use simple heuristic cues to make quick and satisfying purchasing decisions. Both retailers and manufacturers can leverage these insights to seize the opportunities of the developing market for sustainable personal care products.     

The reverse Napoleon effect: The brand appreciation of looking up by tall people

Integrating the embodied cognition framework with research on the self, this study shows that head canting (the vertical tilt of the head to look up vs. down) interacts with a viewer's physical height to influence perceived brand power and behavioral intentions. Three studies use a variety of brand cues in both laboratory and field contexts to test the effect of head canting on brand power evaluations, the role of a person's physical height as a moderator and boundary condition, and the mediating role of consumer–brand identification. Study 1, an experiment, showed that tall, but not short individuals, evaluate a brand as more powerful when looking up (rather than down) at a brand story from a standing position, with differences in brand power impacting brand attitudes and choice. Study 2 replicates these findings with 30 brands, consumers positioned in a seated position, and brand logos. Both studies rule out the construal level as a process mediator. Study 3 further examines the process and demonstrates that the interaction of head canting with a person's height impacts consumer–brand identification, which mediates brand evaluations. These findings add a brand management and physical-self perspective to previous embodiment research by specifically examining the effects of sensorimotor experiences.     

Decision‐making biases and affective states: their potential impact on best practice innovations

Contributions from the decision‐making literature concerning biases and heuristics (i.e., anchoring, framing, confirmatory and availability biases, overconfidence, and representativeness) and from the Affect Infusion Model (Forgas, 1995) are integrated into Rogers's (2003) conceptualization of the stages of innovation adoption and diffusion. Specific propositions based on the decision‐making and affect literatures are made in relation to each stage of the innovation process (knowledge of innovation, persuasion, decision, implementation, and confirmation) to better understand the likelihood of a manager making an informed and appropriate decision concerning the adoption and implementation of best practices. Copyright © 2010 ASAC. Published by John Wiley & Sons, Ltd.     

Gracefully yours: Would snap judgments of one's subtle graceful movements lead to inferences about their emotional intelligence?

Subtle bodily movements such as gracefulness (defined as smoothness, control and elegance in movements) are readily legible by others and these movements might serve as important cues to other people's personal characteristics. The results of four studies contribute theoretically to research on the relationship between movements and emotional intelligence. In study 1, manipulating grace in movements using the Laban Movement Analysis (LMA) system, a person who moves gracefully was found to be judged as more emotionally intelligent (EI) than one who does not move gracefully. In Study 2, EI was shown to predict gracefulness, with EI self-reported by the participants and gracefulness rated by raters. Study 3 demonstrated that a person who moves gracefully (vs. non-gracefully) is judged as more suitable to be a salesperson/spokesperson for a company, mediated by perceived EI. Study 4 showed that a brand whose logo moves gracefully (vs. non-gracefully) is judged as more adaptable and as having higher service quality. Current research documents a consequential impact of such cues on consumption and have substantial practical implications for marketers.     

Verticality in product labels and shelves as a metaphorical cue to quality

This study investigates how subtle visual cues related to the design of a product's package (i.e., label position) and the context (i.e., shelf orientation) influence consumer evaluation and behavioral intention. Extending research on metaphorical cues, Study 1 shows that consumers perceive a product as more powerful when the label on the package is placed in a higher (vs. lower) vertical position. Extending the focus from package design to the display context of packages, Study 2 shows that consumer perception of a product's power is similarly enhanced when the package is placed on a shelf that is vertically (vs. horizontally) orientated. Across both studies effects of enhanced power perception extend to positively influence product quality inferences and behavioral intentions. These findings add to current knowledge on metaphorical cues in package design and the package's presentation context and offer insights into the underlying mechanism.     

The effect of customer service on retailers’ shareholder wealth: The role of availability and reputation cues

Retailer customer service has been shown to lead to increases in consumer attraction and retention, but what is less apparent is whether shareholders are fully rewarded for retailers’ customer service efforts. Results from an event study on 48 retailer announcements of customer service strategies indicate that customer service increases retailer market values by 1.09 percent on average. The magnitude of this abnormal return suggests that customer service is one of the more effective ways for firms to create shareholder wealth. Further, analysis of the abnormal returns suggests that the shareholder value created by the retailer's customer service is affected by the heuristics and cues used to judge the likelihood of service delivery. Consistent with the availability heuristic, we find that services that are difficult to bring to mind and non-vivid services create significantly less shareholder value. Results further show that the retailer's reputation can also significantly inhibit the customer service's shareholder wealth creation.     

What's in a logo? The impact of complex visual cues in equity crowdfunding

Visual cues are pervasive on crowdfunding platforms. However, whether and how low validity visual cues can impact the behavior of backers remains largely unknown. In this article, we propose a disfluency-based heuristic framework for understanding the influence of low validity visual cues on equity crowdfunding platforms. Drawing on processing fluency theory and visual heuristics, we propose that backers often automatically process visual cues, and that the subjective experience of ease/difficulty with which backers perceptually process low validity visual cues serves as a heuristic and informs their perceptions of early-stage entrepreneurial ventures. We test our propositions focusing on logos (low validity visual cues that are particularly salient and ubiquitous on equity crowdfunding platforms) and logo complexity (a fundamental characteristic of logo design and established antecedent of processing disfluency). We contend that logo complexity can be interpreted by backers as a signal of venture innovativeness because more (vs. less) complex logos are more difficult to process, and thus, feel less familiar and more unique, original, and novel to backers. Since backers often value innovativeness, we further contend that logo complexity can positively impact backers' funding decisions. We find support for our framework and propositions using a multimethod approach comprising three studies: one survey, one field study, and one experiment. Theoretical contributions and managerial implications are also discussed.     

An examination of consumers' use of heuristic cues in making satisfaction judgments

This study was undertaken to investigate the propensity of consumers to rely on heuristic cues when making satisfaction judgments in a repeat-purchase context. The objective of this investigation was twofold: first, to investigate the impact of mood states at the information-encoding stage for both on-line and memory-based judgments, and second, to examine whether information-processing efficiency can provide new insight into the initial-judgment effect in a consumer-behavior context. The results of this experiment indicate that inefficient information processors may be subject to biased satisfaction evaluations caused by their mood states at the information-encoding stage. Efficient information processors, on the other hand, tend to partial out the impact of mood in their postpurchase evaluations. Despite this fact, high-capacity information processors are not free from bias; they seem to be heavily guided by prior judgments in subsequent evaluations of the same consumption object. In sum, motivation rather than ability to process information may be the key factor in a consumer's propensity to use heuristics during the postpurchase evaluation process. The marketing implications of these findings are briefly discussed. © 1998 John Wiley & Sons, Inc.     

Interorganizational imitation heuristics arising from cognitive frames

The literature on organizational imitation mostly disregards its cognitive aspect. Yet, imitation is a cognitive heuristic. The study draws a unifying framework of imitation theories through a cognitive lens in the context of innovation adoptions. The premise is that organizations imitate in order to improve the status quo or to avoid losing it. The interaction of the framing of imitation and the organization's evaluation of an innovation as threats or opportunities results in the use of combinations of the two most popular imitation heuristics – “imitate the successful” and “imitate the majority.” Since the framings dictate different imitation timings, the speed of innovation diffusion depends on these interactions. The study contributes to the organizational learning literature by proposing that social learning is subject to interpretations resulting in the use of different imitation heuristics. Its contribution to the decision-making literature is that complex strategic decisions employ imitation heuristics from Gigerenzer's adaptive toolbox.     

The impact of stereotyping on consumers' food choices

There is mounting evidence to show that people's food choices are influenced by social others. However, there is scant research on how consumers' food choices are affected by perceived competence of others present in the retail setting. The findings of Study 1 indicate that when the other customer is perceived as competent (i.e., paying with a Platinum Amex), the focal consumer chooses the same (organic vs. standard) chicken wrap. However, such a mimicking behavior is absent when the other customer lacks competency cues (i.e., paying with food stamps). Study 2 shows that social modeling doesn't occur in the context of indulgent food choices. Moreover, the findings of Study 2 demonstrate that competence cues perceived similarity between the other customer and the focal consumer.     

Hierarchical heuristics in evaluation of competitive brands based on multiple cues

The primary focus of this research is to develop a conceptual framework for analyzing the process by which consumers evaluate brand quality based on multiple cues. The representative design nature of this theory provides a strong analytical foundation for comparing the use of hierarchical versus nonhierarchical heuristics by consumers in making overall brand evaluations It also enables the modeling of individual differences among consumers in their choice of heuristics to evaluate brands. Results of an illustrative experimental investigation show that hierarchical heuristics are as effective as nonhierarchical, or full-profile, heuristics. It is also shown that brand evaluation heuristics can be broken down into an intuitive (nonlinear) component and a rule-bound (linear) component. © 1994 John Wiley & Sons, Inc.     

Trade Policy Flexibilities and Turkey: Tariffs,Anti‐dumping,Safeguards and WTO Dispute Settlement

The commitment to lower import tariffs and to maintain tariffs at low levels entails political‐economic trade‐offs. Empirical work examining the relationship between such commitments and the ‘flexibilities’ that policymakers exercise to get around them is still relatively nascent, especially for emerging economies. This paper provides a rich, empirically based assessment of ways that Turkey exercised trade policy flexibilities during the global economic crisis of 2008–11. First, and despite multilateral and customs union commitments that might limit changes to its applied tariffs, Turkey exercised flexibilities during 2008–11 by making changes to both its applied MFN and preferential tariffs that could affect nearly 9 per cent of its manufacturing imports. Second, Turkey's cumulative application of temporary trade barrier (TTB) policies – that is, anti‐dumping, safeguards and countervailing duties – is estimated to impact an additional 4–6 per cent of Turkey's manufacturing imports by 2011. Other surprising results include Turkey's lengthy extensions to the duration of previously imposed anti‐dumping and safeguards beyond expected removal dates, conversion of product coverage from one TTB policy to another, extensive coverage of upstream and downstream segments of important industries and potential deepening of discriminatory preferences already inherent in existing preferential trade agreements.     

Eco depletion: The impact of hunger on prosociality by means of environmentally friendly attitudes and behavior

The present research investigated the impact of hunger on prosociality in a consumer choice context by means of environmentally friendly attitudes and behavior. Two eye-tracking studies were conducted with hunger measured (Study 1) and manipulated (Study 2). The data were analyzed through bivariate correlations, Pearson's chi-square tests, and analyses of variance (ANOVAs). Our findings, based on cross-sectional and experimental evidence from field and lab settings, revealed that hungry consumers express more prosocial attitudes than their satiated counterparts in terms of general environmental concerns and importance ratings of buying eco-labeled products. However, we found no significant difference between hungry and satiated consumers regarding choice likelihood of eco-labeled products or visual attention towards prosocial (organic and sustainable) food options. Implications for retailers and organizations trying to encourage environmentally friendly behavior are discussed.     

Viewers' processing of Actor's race and message claims in advertising stimuli

This study examines the impact of white and black actors' race and viewers' racial attitudes on advertisement evaluation, A total of 160 white and 140 black participants rated an advertisement featuring a white or black actor promoting a portable word processor or a liquid laundry detergent. An assessment of racial attitudes (i.e., whites' racial prejudice and blacks' identification with black culture) followed product, advertisement, and actor ratings. The findings indicated that, when the black actor promoted the relatively inexpensive liquid detergent, viewers with stronger racial attitudes were more likely to employ racially focused heuristics than viewers with weaker racial attitudes. The data did not support the notion that viewers with less defined racial attitudes would be more likely to consider the message claims than viewers with firmly established racial attitudes. These findings provided partial support for the heuristic versus systematic processing distinction.     

The Effects of Model Size and Race on Chinese Consumers’ Reactions: A Social Comparison Perspective

Previous research on women's reactions to female body images in advertisements has been restricted to same race target women and models, and typically conducted among Western participants. The present research examines the combined effects of model race and size for the first time, and extends inquiry to Chinese consumers. Results across four experiments demonstrate that model race and size are potent informative cues that influence Chinese consumers’ self‐esteem and advertising effectiveness. Studies 1a and 1b suggest that model race is an informative trigger predicting differential social comparison and subsequent self‐esteem judgments for Chinese women, but has no effect on Chinese men's self‐esteem. In addition, model size exerts differential impacts on Chinese women's and men's self‐esteem. Study 2 shows that manipulation of the social comparison mechanism may outweigh that of race as an informative cue. Study 3 examines the relationship between model size and Chinese women's evaluative responses to advertisements. These findings not only contribute to the literature, but also offer practical guidelines for marketers advertising in China.     

Fundraising and the Elderly: A Content Analysis

Direct marketing, as an avenue for fundraising, provides nonprofit organizations with the ability to fulfill their missions and donors the opportunity to support a worthy cause. There are concerns, however, when sophisticated marketing practices target potentially at-risk consumers. Demographic studies clearly show that the percentage of elderly Americans, aged 65 and over, is rising with a corollary increase in the incidence of Alzheimer’s disease and dementia. These facts suggest this may be a group whose defining characteristics make them especially vulnerable. This exploratory study identifies and qualifies persuasive tactics used by several linked nonprofit organizations targeting one elderly Alzheimer’s victim over a 14-month period. The carefully designed direct mail solicitations utilize appeals that engender low elaboration likelihood and peripheral route processing. In addition, there is some evidence that even those appeals that might encourage high elaboration likelihood become heuristic cues for individuals with cognitive decrease. Taken together, the incorporation of multiple tactics within each solicitation, an approach referred to here as shotgunning, may have significant implications for future research and practice in communication, ethics, and public policy.