Buyer decision process

This article is about consumers' purchasing decision processes. For industrial or business purchasing decision-making, see Procurement § Decision-making.

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As part of consumer behavior, the buying decision process is the decision-making process used by consumers regarding the market transactions before, during, and after the purchase of a good or service. It can be seen as a particular form of a cost–benefit analysis in the presence of multiple alternatives.[1][2]

Common examples include shopping and deciding what to eat. Decision-making is a psychological construct. This means that although a decision cannot be "seen", we can infer from observable behavior that a decision has been made. Therefore, we conclude that a psychological "decision-making" event has occurred. It is a construction that imputes a commitment to action. That is, based on observable actions, we assume that people have made a commitment to effect the action.

Nobel laureate Herbert A. Simon sees economic decision-making as a vain attempt to be rational. Simon claimed (in 1947 and 1957) that if a complete analysis is to be done, a decision will be immensely complex. Simon also wrote that peoples' information processing ability is limited. The assumption of a perfectly rational economic actor is unrealistic. Consumers are influenced by emotional and nonrational considerations making attempts to be rational only partially successful. He called for replacing the perfect rationality assumptions of homo economicus with a conception of rationality tailored to cognitively limited agents.[3] Even if the buyer decision process was highly rational, the required product information and/or knowledge[4] is often substantially limited in quality or extent,[5][6] as is the availability of potential alternatives. Factors such as cognitive effort and decision-making time also play a role.[6][7][8][9]

  1. ^ Engel, James F.; Kollat, David T.; Blackwell, Rodger D. (1968). Consumer Behavior (First ed.). New York: Holt, Rinehart and Winston.
  2. ^ Nicosia, Francesco M. (1966). Consumer decision process marketing and advertising implications. Englewood Cliffs, NJ: Prentice Hall.
  3. ^ Forest, Joëlle; Mehier, Caroline (September 2001). "John R. Commons and Herbert A. Simon on the Concept of Rationality". Journal of Economic Issues. 35 (3): 591–605. doi:10.1080/00213624.2001.11506392. ISSN 0021-3624. S2CID 155308332.
  4. ^ Millward-Hopkins, Joel; Kause, Astrid; Bruin, Wändi Bruine De; California, University of Southern. "Even concerned consumers don't know which food choices have the lowest climate impact". phys.org. Retrieved 4 November 2022.
  5. ^ Sarokin, David; Schulkin, Jay (26 August 2016). Missed Information: Better Information for Building a Wealthier, More Sustainable Future. MIT Press. p. 100. ISBN 978-0-262-03492-0.
  6. ^ a b Arratia, Ramon (18 December 2012). "Full product transparency gives consumers more informed choices". The Guardian. Retrieved 4 November 2022.
  7. ^ Young, William (2010). "Sustainable Consumption: Green Consumer Behaviour when Purchasing Products" (PDF). Sustainable Development. 18 (18): 20–31. doi:10.1002/sd.394. hdl:10059/1015.
  8. ^ d’Adda, Giovanna; Gao, Yu; Tavoni, Massimo (April 2022). "A randomized trial of energy cost information provision alongside energy-efficiency classes for refrigerator purchases". Nature Energy. 7 (4): 360–368. Bibcode:2022NatEn...7..360D. doi:10.1038/s41560-022-01002-z. hdl:2434/922959. ISSN 2058-7546.
  9. ^ Huettner, Frank; Boyacı, Tamer; Akçay, Yalçın (1 May 2019). "Consumer Choice Under Limited Attention When Alternatives Have Different Information Costs". Operations Research. 67 (3): 671–699. doi:10.1287/opre.2018.1828. hdl:10419/178629. ISSN 0030-364X.