CGSC 1001 Lecture Notes - Lecture 9: Herd Behavior, Time Preference, Loss Aversion
29 May 2015
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Document Summary
The anchoring is a processes of comparing something when you evaluate. The anchor is what you compare something to when you evaluate it. An example would be comparing a movie to another movie when you say its good. Restaurants use anchoring by putting a very expensive on the menu to make other items look more reasonably priced. The bandwagon effect is believing things because everyone else around you believes the same thing. An example of this can be seen in sports when people are called bandwagons for liking a team for doing good. The bandwagon effect is why cults try to keep their members from talking to people outside of the cult so that they are not influenced by outside influences that are opposing the views of the cult. The herd instinct is believing what everyone else does to avoid any social conflict. An example of this would be someone is vegan because their spouse is a vegan.
