7/7/2023 0 Comments Prototype theoryAccordingly, it is proposed that prompting consumers to consider reasons why their expenses might be different than usual will increase prediction accuracy by making atypical expenses cognitively easier to retrieve. ![]() This leads consumers to under-predict their expenses because, generally speaking, the distribution of expenses is positively skewed with mode < mean. These attributes represent a consumer’s average spending, where “average” refers to the mode of their expense distribution. The logic of the prototype theory is that expense predictions are based on prototype attributes that come to mind easily when predictions are being constructed. ![]() ![]() The present research develops a prototype theory of consumer expense misprediction that helps explain why consumers display an expense prediction bias in which they under-predict their future spending, and how expense prediction accuracy can be improved.
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