Thesis subject

Impact of Cognitive Biases and Incomplete Information on Consumer Choices: Exploring Bounded Rationality and Irrationality in Consumer Behavior (MSc)

Short description

Consumer choices are frequently influenced by cognitive biases and the availability of information, resulting in bounded rationality and irrational decision-making. This thesis focuses on examining the impact of cognitive biases and incomplete information on consumer behavior. Utilizing established theories and literature in the field of consumer behavior, the research aims to develop a (agent-based) model that captures the essence of bounded rationality in consumer decisions. Open-access data could be used to validate the model, offering practical insights for businesses and marketers to understand and mitigate irrational consumer behaviors.

Objectives

  1. Identify key theories and models in consumer behavior that explain the impact of cognitive biases and incomplete information on purchasing decisions.
  2. Develop a computational model to analyze how cognitive biases and/or incomplete information influence consumer choices, leading to bounded rationality and irrational behavior.
  3. Utilize open-access data to validate the model.

Tasks

The work in this master thesis entails:

  • Literature Review: Conduct a thorough review of existing research on cognitive biases, incomplete information, bounded rationality, and consumer behavior. Identify key theories and conceptual models.
  • Theoretical Framework: Develop a theoretical framework based on consumer behavior literature that explains how cognitive biases and incomplete information lead to bounded rationality and irrational consumer choices.
  • Model Design and Development: Create a model that integrates the identified theories and applies them to analyze the impact of cognitive biases and incomplete information on consumer decision-making.
  • Simulation and Testing: Conduct simulations and empirical tests to evaluate the model's accuracy and robustness in explaining consumer behavior influenced by cognitive biases and incomplete information.
  • Analysis and Reporting: Analyze the results, identify key findings, and discuss the implications for marketers and businesses. Document the research process and outcomes in a comprehensive thesis report.

Requirements

  • Required skills/knowledge: Programming skills and willingness to learn new algorithms and simulation tools.

Co-Supervision

In addition to Dr. Yara Khaluf from the Information Technology group, this thesis will be co-supervised by Dr. Ilona de Hooge from the Marketing and Consumer Behavior group.

Contact person(s)

Yara Khaluf (yara.khaluf@wur.nl)

Ilona de Hooge (ilona.dehooge@wur.nl)