Mapping Out Marketing

ENTRY #43     What role do consequences play in motivating consumers?

George Loewenstein

Herbert A. Simon Professor of Economics and Psychology, Carnegie Mellon University

Standard models of decision making are consequentialist; they assume that when people make a decision they consider the consequence of alternative courses of action, and their feelings about those consequences (utilities). When outcomes are delayed, as is usually the case, people are assumed to “discount” those consequences at a fixed discount rate; when outcomes are uncertain, people are assumed to down-weight them proportionately to their chance of happening.

Behavioral ...