Date of Award
5-2-2024
Degree Type
Dissertation
Degree Name
Doctor of Philosophy (PhD)
Chair and Committee
Robyn LeBoeuf
Committee Members
Cynthia Cryder
Abstract
In this dissertation, I describe two programs of research to demonstrate how logically irrelevant factors can influence everyday judgment and decisions. Chapter 1 looks at a common human behavior: prediction. In collaboration with Robyn LeBoeuf, we investigate a particular factor that may bias people’s predictions against their own judgment: the absolute likelihood of the most likely outcome. Previous research usually assumes that, when making a prediction from a set of possible outcomes, people select as their prediction the outcome that seems most likely to them. However, we find a disconnect between what people predict and what they believe to be most likely to arise. We find that the disconnect arises because people are sensitive to the absolute likelihood of the most likely outcome, although the absolute likelihood does not determine the best prediction that maximizes accuracy. Specifically, when the most likely outcome has a low (vs. high) absolute likelihood, people less often choose the most likely outcome as their prediction—even though they still believe this outcome is most likely to arise. Chapter 2 looks at a more specific domain of consumer behaviors: co-branded credit card usage. In collaboration with Cynthia Cryder and Scott Rick, we find that credit card co-branding discourages people from using a co-branded credit card outside the card’s featured brand. Co-branded credit cards are typically backed by a payment-processing network such as Mastercard or Visa and can be used anywhere the network is accepted. However, across one descriptive survey and four experiments, we show that consumers are less likely to use a co-branded credit card (compared to its non-co-branded counterpart) for purchases that do not match the featured brand, even when the co-branded card maximizes the cashback reward. We identify two mechanisms. First, the featured brand on a co-branded credit card produces assumptions about the card’s reward structure, and those assumptions limit consumers’ attention to the actual reward structure. Second, the featured brand on a co-branded credit card makes purchases outside of the featured brand feel like a bad “fit”, discouraging consumers from using the card outside of the brand. We discuss both consumer and managerial implications.
Recommended Citation
Sun, Chengyao, "Essays on Judgment and Decision Making" (2024). Olin Business School Electronic Theses and Dissertations. 43.
https://openscholarship.wustl.edu/olin_etds/43