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Behavioral biases in marketing

Abstract

Psychology and economics (together known as behavioral economics) are two prominent disciplines underlying many theories in marketing. The extensive marketing literature documents consumers’ nonrational behavior even though behavioral biases might not always be consistently termed or formally described. In this review, we identify and synthesize empirical research on behavioral biases in marketing. We document the key findings according to three classes of deviations (i.e., nonstandard preferences, nonstandard beliefs, and nonstandard decision making) and the four phases of consumer purchase decision making (i.e., need recognition, pre-purchase, purchase, and post-purchase). Our organizing framework allows us to (1) synthesize instructive marketing papers in a concise and meaningful manner and (2) identify connections and differences within and across categories in both dimensions. In our review, we discuss specific implications for management and avenues for future research.

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Fig. 1

Notes

  1. A review documenting empirical findings in the field of behavioral finance is provided by Barberis and Thaler (2003).

  2. http://evonomics.com/behavioraleconomics-neglect-marketing.

  3. In contrast to the typical context-free laboratory experiments performed in the field of economics, laboratory studies in the field of marketing usually involve a marketing context and may, therefore, provide interesting insight into how consumers and firms might behave under different circumstances.

  4. The Appendix summarizes examples of each bias dimension from seminal papers, including a verbal definition and an illustration, in three tables (one per class of biases).

  5. https://www.scopus.com.

  6. The rationale for searching the title, abstract, and keywords is that this information is accessible to everyone and not behind a paywall. This permissibility facilitates the replicability of the process.

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Acknowledgments

The authors would like to thank Dirk Engelmann, Michael Steiner, Ossama Elshiewy, Vlada Pleshcheva, three anonymous reviewers, the associate editor, and the editors of the Special Issue for helpful comments and suggestions. Financial support by Deutsche Forschungsgemeinschaft through CRC TRR 190 is gratefully acknowledged.

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Appendix

Appendix

For the interested reader, we provide a more detailed explanation of different biases within each of the three classes of deviations from the standard economic model (DellaVigna 2009): nonstandard preferences, nonstandard beliefs, and nonstandard decision making. In particular, for each class of behavioral biases, we present corresponding tables (i.e., Tables 7, 8 and 9), which provide examples of biases, direct readers to prominent articles on specific biases, as well as include a nonformal definition and an illustration of the respective biases (see e.g., Dhami 2016 for more formal and extended explanations of the behavioral biases). We further note that while we follow DellaVigna (2009) in separating the three classes of deviations, they are often interrelated.

Table 7 Biases related to nonstandard preferences
Table 8 Biases related to nonstandard beliefs
Table 9 Biases related to nonstandard decision making

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Dowling, K., Guhl, D., Klapper, D. et al. Behavioral biases in marketing. J. of the Acad. Mark. Sci. 48, 449–477 (2020). https://doi.org/10.1007/s11747-019-00699-x

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Keywords

  • Marketing
  • Consumer purchase decision making
  • Behavioral economics
  • Behavioral biases
  • Review