סמינר בשיווק

Eyal Pe’er, Bar-Ilan University

Abstract:

Efficiency measures are ubiquitous both in the fields of consumer products (e.g., miles per gallons, megabits per second) and manufacturing productivity (e.g., units made per hour). Although efficiency measures are mathematically sound and useful, consumers are ill-equipped to use them appropriately due to their property of non-linearity: all efficiency measures, by definition, maintain a curvilinear relationship with the outcome variable that is usually more of an interest to consumers - consumption rate. For example, Internet download speed (Mbps) has a curvilinear relation to download time (e.g., seconds to download 100 Mb). Consumers, however, falsely believe that the two are linearly related, and routinely substitute one for the other, leading them to systemic and considerable biases in judgment and choice. I will review and explain these biases, and their implications, using several lab and field studies. I will then outline some potential nudges that sometimes reduce these biases, and present a comparative study of these nudges. Bases on these, I will discuss some implications for consumers, policy makers, marketers and managers that make decisions based on (apparently inefficient) efficiency measures.