ADSSystem

Consumer and Behavioral Economics glossary

In one line

87 terms from Consumer and Behavioral Economics, each defined in a sentence or two, with a link to the calculator that works the number out where one exists.

A13
Action Intention

A concrete plan to act, which predicts behaviour better than a general intention.

Ad Attention

Attention an ad actually received, as opposed to impressions served.

Ad Avoidance

Actively skipping, blocking or ignoring advertising.

Ad Response Probability

The odds an exposure produces any reaction.

Advertising Skepticism

Default disbelief in advertising claims. Rises with every unmet promise in the category.

Anchoring Effect

The first number shown dragging every later judgement toward it.

Attention Allocation

How people distribute limited attention across competing demands.

Attention Economics

Treating attention as the scarce resource being bought and sold.

Open the calculator →
Attention Market

The market where advertisers compete for that attention.

Attention Scarcity

There being far more content than attention to spend on it.

Attention Value

What a second of genuine attention is worth.

Authority Bias

Trusting a claim more when it comes from a perceived expert.

Availability Heuristic

Judging likelihood by how easily examples come to mind.

B4
Bandwagon Effect

Doing something because others are.

Behavioral Economics

The study of how people actually decide, as opposed to how models assume they do.

Behavioral Intention

Stated readiness to do anything.

C15
Choice Architecture

How options are arranged and what that arrangement does to the choice.

Choice Overload

Too many options producing no decision at all. Cutting the range often lifts sales.

Choice Probability

The odds of being picked from that shortlist.

Churn Probability

The odds of leaving.

Open the calculator →
Click Probability

The odds an impression produces a click. What every CTR prediction model estimates.

Open the calculator →
Cognitive Load

How much mental effort something demands. High load kills conversion.

Open the calculator →
Commitment Effect

A small first step making a larger one more likely.

Confirmation Bias

Noticing evidence that agrees with you and skipping the rest. The main reason bad campaigns survive.

Consideration Probability

The odds of making someone shortlist.

Consistency Principle

People acting in line with what they already said or did.

Consumer Attention

Attention available from the buyer side.

Consumer Economics

How households allocate limited money across competing wants.

Consumer Utility

Utility from the buyer point of view.

Conversion Probability

The odds a given visitor converts.

Open the calculator →
Conversion Propensity

A modelled likelihood of converting, used for bidding and targeting.

D3
Decision Fatigue

Choices getting worse as the day and the process wear on.

Decoy Effect

Adding a deliberately worse option to make another look better.

Default Effect

Whatever is preselected wins far more often than it should.

E4
Economic Utility

The formal version of usefulness in economic models.

Endowment Effect

Valuing something more once you own it. Why free trials convert.

Expected Utility

Satisfaction weighted by how likely it is to arrive.

Explicit Memory

Deliberate, conscious recollection.

F1
Framing Effect

The same fact landing differently depending on how it is worded.

H2
Herd Behavior

Following the crowd rather than the evidence.

Hyperbolic Discounting

Future value shrinking sharply the further away it sits. Why annual plans need a discount.

I3
IKEA Effect

Valuing something more because you helped build it.

Implicit Memory

Influence without conscious remembering.

Information Cost

The effort of understanding what you are buying.

L1
Loss Aversion

Losses hurting more than equivalent gains please. Roughly twice as much.

M8
Maximum Willingness To Pay

The same idea, spelled out.

Open the calculator →
Media Attention

Attention a channel or format tends to command.

Memory Encoding

Getting something into memory in the first place.

Memory Retrieval

Getting it back out at the moment of choosing. Brand advertising is a bet on this.

Mental Accounting

Treating money differently depending on which mental pot it sits in.

Mere Exposure Effect

Liking something more simply from seeing it repeatedly. The mechanism behind brand advertising.

Message Complexity

How hard the message is to process at speed.

Minimum Willingness To Accept

The least a seller will take.

P10
Peak-End Rule

An experience remembered by its most intense moment and its ending.

Perceived Risk

Their read on that, which is what you have to address.

Perceived Value

What it feels worth, which is the only value that affects the sale.

Persuasion Knowledge

People recognising they are being sold to, and resisting accordingly.

Present Bias

Overweighting what happens now against what happens later.

Processing Fluency

How easily something is understood. Fluent things feel more true.

Prospect Theory

The model explaining loss aversion and reference dependence together.

Purchase Intention

Stated readiness to buy. Weakly related to actually buying.

Purchase Probability

The odds of a purchase in a defined window.

Purchase Risk

What the buyer stands to lose if it goes wrong.

Q1
Quality Signal

Anything suggesting the product is good, from price to packaging.

R10
Recall Memory

Producing it from nothing. Much harder, much more valuable.

Reciprocity

Feeling obliged to return a favour. Why free tools and samples work.

Recognition Memory

Knowing something when you see it.

Reference Dependence

Judging outcomes against a reference point rather than in absolute terms.

Referral Probability

The odds of bringing someone else.

Repeat Probability

The odds of buying again.

Open the calculator →
Representativeness Heuristic

Judging by resemblance to a stereotype rather than by base rates.

Reservation Price

The most a buyer will pay before walking.

Open the calculator →
Retention Probability

The odds of still being a customer later.

Open the calculator →
Risk Perception

How risky the purchase feels, regardless of actual risk.

S8
Scarcity Effect

Limited availability raising perceived value. Corrosive when invented.

Search Cost

The effort of finding and comparing options. Lower it and you win by default.

Selective Attention

Noticing only what is relevant right now.

Selective Exposure

Choosing to encounter only agreeable information.

Selective Perception

Interpreting what you see to fit what you already believe.

Social Signaling

Buying partly to communicate something about yourself.

Status Quo Bias

Preferring things to stay as they are, even when change is better.

Sunk Cost Effect

Continuing because of what was already spent. Kills more campaigns than bad targeting.

T1
Trust Signal

Anything reducing the fear of being ripped off.

U2
Urgency Effect

A deadline pushing a decision forward.

Utility

The satisfaction a purchase delivers.

Z1
Zeigarnik Effect

Unfinished tasks staying in memory. Why abandoned cart emails work.