Preferences and Decisions.......

A common assumption in is that ‘‘each individual has stable and coherent preferences’’. In addition, it is often assumed that ‘‘people know their preferences’’. They have the ability or skill in computation to identify calculate the option that maximizes received value, and that they will choose accordingly (Freeman 1993). According to rational choice theory, people have preferences that are related to their behaviour. However, large body of research indicates  that preferences are generally constructed, rather than revealed at the time valuation question is asked. Two major beliefs of the constructive perspective on preferences are that 1. expressions of preference are generally constructed at the time the valuation question is asked and 2 the construction process will be shaped by the interaction between the properties of the human information processing system and the properties of the decision task Payne, Bettman, and Johnson, 1992; Slovic, 1995 ,leading to highly contingent decision behaviour. This view  assumes that people do not have existing well-defined values for many objects; in addition, when asked a valuation question, they will selectively use information that is part of the immediate task description, as well as information that is drawn selectively from memory, to construct a response on the spot. The constructive view also asserts that preferences are not necessarily generated by applying some invariant process such as expected utility maximization; instead, a wide variety of heuristics strategies may be used in constructing a preferential response (Simon, 1955). Individuals may construct preferences because they lack the cognitive resources needed to compute and store well-defined preferences for many situations.

Lets consider consumers behaviour according to "preference construction". This view suggests  the idea that consumer preferences are not well defined but rather constructed in the process of making a choice. So consumer choice  can be manipulated by manipulating the content of the choice or by manipulating which content is the focus of attention ( Shafir, 1993). Scary, when I think about it, most of my purchases were implemented by clever retailers. And I was wondering why I am always broke :)........