Question

A salesperson driving to visit a client located two hours away has a tire blow out on the highway. He walks about a mile to the next exit, where he finds a service station. THe owner of the station says he can replace it but for twice as much. They pay. THis illustration the effect of ___ on buying bevhavior

a. cultural backgorund
b. social groups
c. the purchase situation
d. the learning situation
e. reference group

Answer 1

The effect illustrated by the student's example is the influence of the purchase situation on buying behavior. This shows how specific circumstances can impact decision-making, which is an element of behavioral economics. The correct option is c.

Step-by-step explanation:

The illustration provided by the student depicts the effect of c. the purchase situation on buying behavior. In behavioral economics, people often make decisions based on the specifics of a situation, which can seem irrational when viewed without context.

For example, when the salesperson's tire blew out, the urgency of the situation and lack of alternatives may have compelled him to purchase a replacement at a higher price. This scenario demonstrates how immediate circumstances can strongly influence decision-making and purchasing behavior.

Another similar behavioral economics example is the decision to walk an extra five minutes to save $10 on an alarm clock versus doing the same for a $300 phone, showcasing how humans assess value in varying contexts.

Additionally, internal and external factors like attitudes, cognitive dissonance, and conformity can influence our decisions, as can persuasive techniques like the foot-in-the-door phenomenon in sales situations. The correct option is c.