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The Decline Of Consumer Irrationality

Itamar Simonson
Stanford professor Itamar Simonson spent much of his career showing that consumers tend to act irrationally and their preferences are highly malleable. But a few years ago he started having second thoughts in light of the Internet and the changing consumer environment. In this talk he will discuss the rise in consumer rationality and the decline of current marketing mantras about branding and loyalty. Contrary to the now prevalent belief that consumers usually make irrational decisions and can be easily influenced (which he helped establish), Simonson will show how everything changes when consumers base their decisions on reviews from other users, easily accessed expert opinions, price comparison apps, and other emerging technologies. Instead of relying on often unreliable proxies such as brand names, prior experience and loyalty, or price, consumers can make decisions based on the products’ “Absolute Value.” Based on his new book Absolute Value (with Emanuel Rosen) Simonson will present the far reaching implications of the changes in consumer decision making for marketing and management, including positioning, persuasion, market research, and influence more generally.
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