MARK 322: JUDGMENT AND DECISION MAKING FOR MARKETERS
A. V. “Muthu” Muthukrishnan
Decision making is one of the most important human activities. Nonetheless, decision
making as an academic discipline is relatively new. Because it is a vibrant area of
research in psychology and economics, the subject is quite fascinating. The concepts
can be applied to judgments and choices in many fields, and therefore, we will discuss
the applications of the concepts to consumer as well as managerial decision making.
This course covers both normative and psychological aspects of decision making with
specific reference to marketing and consumer decisions. The course will introduce the
building blocks of decision making such as belief and utility assessment and will
contrast the economic models of decision making with psychological models that take
into account various biases in judgments and choices. The course will also introduce
experimental design and analysis relevant for marketing decisions and will discuss the
marketing applications of behavioral decision research.
Prerequisites and Expectations
The course will be appropriate for the third year students in marketing. The course
will also be relevant for the third year students in other disciplines such as economics,
management, accounting, and information systems. The prerequisites are MARK 112
(Basic Marketing) and ISMT 111 or equivalent courses completed elsewhere. The
students should have an aptitude for problem solving. I will cover certain statistical
and economic concepts relevant for decision making. I expect you to have an aptitude
for quantitative methods even if you are not an expert.
The course has two objectives: (1) To improve the analytical skills so as to make
students better decision makers within the marketing context and (2) to offer
knowledge about the psychology of decision making so that the students gain better
understanding of customers and device marketing strategies accordingly.
Goodwin, Paul & Wright, George (2004), “Decision Analysis for Management
Judgment,” 3rd. edition, New York: John Wiley.
Other Books for Occasional Reference
1) Hogarth, Robin (1987), “Judgment and Choice,” 2nd edition, New York: John
2) Bazerman, Mark (1994), “Judgment in Managerial Decision Making,” New
York: John Wiley.
3) Plous, Scott (1993), “The Psychology of Judgment and Decision Making,”
New York: Mc-Graw Hill.
Apart from these books, I will assign several journal articles. Note that while some of
these articles investigated decision making especially from a marketing angle, others
are from the basic disciplines of psychology and economics. The subject matter
certainly offers a lot of challenges as well as rewards.
I expect you to come to class on time and contribute to learning. Typically, in each
class, I will lecture for about an hour and allocate the remaining time for class
discussions. Several sessions will be devoted to problem solving. There are certain
topics that I would like to cover exclusively via discussion. You need to read
intensively the assigned chapters/materials to gain out of these discussion classes. In
general, you are encouraged to raise questions on the topics covered. You are also
encouraged to offer any comments or observations that may occur to you. While
attendance is not compulsory, if you miss too many classes, you probably cannot do
well either in the exams or in the participation component. Also I would expect you to
adhere to strict code of conduct during class hours and also in the exams.
Every time before coming for the lecture please download the lecture notes. All the
materials related to the course will be found on the course website. The link to the
website is as follows: http://www.bm.ust.hk/~mark322/
Evaluation: The course grade is based on the following components.
Quiz I – 20%
Quiz II – 20%
Quiz III - 25%
Group Presentation – 15%
Project – 15%
Class Participation – 5%
Additional Activity (Marketing Experiments or an alternative activity; for
experiments, see below. Instead of experimental participation, you may opt to do
assignments. Contact Marketing Department Office or Prof. Anirban Mukhopadhyay
(Marketing) for details) – 2%
You can earn two points for participation in two marketing experiments of one credit
each (or one experiment for two credits, which means either the experiments are
longer, approximately two-hours long, or you may need to go twice, each time for
about an hour). You should check the bulletin board in front of the marketing office
for all announcements regarding the experiments conducted by marketing faculty.
The quizzes in general will require you to either solve problems or write short
answers. While the length of the answer may vary from one question to another,
typically you don’t need to write more than five sentences for any question.
Typically the groups consist of four members. It is your own responsibility to identify
your group partners. My past experience has shown that group performance is better
when the students themselves (and not I) form the groups. Group formation should be
completed immediately after the deadline for add/drop. I should get the group list,
which is attached at the end of the course syllabus, by September 16. It is your
responsibility to identify your group partners. Please do not wait until the last day. Try
to choose your group partners well before the deadline and give me the list of names
on Sep 16.
I will assign an article on consumer decision making for each group. The group
should read the article and present the main points to the class. I expect you to hand in
a two-page summary of the article prior to presentation. The grades will be based on
the write-up as well as the talk.
Group Project: The details will be announced later.
Smita Gupta will be your TA for this course. For any course related matter you can
contact her at firstname.lastname@example.org
MARK 322: JUDGMENT AND DECISION MAKING FOR MARKETERS:
Decision Making via Experiments: Experimental Methods in Psychology &
Experimental Designs (Lecture Notes)
Analysis of Variance – A simple case (Problem Sheets)
ANOVA for Factorial Designs (basic two-factor designs only)
Consumer Decision Making - An Overview
Decisions Involving Multiple Objectives (Chapters 1 and 2)
How People Make Decisions Involving Multiple Objectives (Chapter 3)
September 30th - Quiz I (topics covered until then)
Subjective Probability (Chapter 4)
Decision Making under Uncertainty I
Decision Making under Uncertainty II – Prospect Theory (Kahneman and
Tversky 1986 paper and parts of Chapter 13)
Decision Making under Uncertainty III – Single & Multi attribute Utility
Elicitation (Chapter 5)
Probability Assessment (Chapter 10: It will be a discussion class)
Biases in Probability Assessment (Chapter 9)
October 28th - Quiz II (Topics covered until then)
Decision Trees and Influence Diagrams (Chapter 6)
Revising Judgments Based on Additional Information I (Chapter 8) – Value of
Revising Judgments Based on Additional Information II (Chapter 8) – Value
of Imperfect Information
Behavioral Decision Theory Findings in Marketing I - Articles by (Simonson,
Shaffir, and Tversky & by Simonson).
Behavioral Decision Theory Findings in Marketing II – Lecture Notes
Anomalies in Judgments and Choices – Lecture Notes & Short papers from
Journal of Economic Behavior & Organization
December 2nd - Quiz III
Project: The projects are due on or before Monday, December 7th.
Group Member Form
Name English Student Email ID Major Attach a photo