Priming Effect: A Heuristic in Behavioural Economics

Abstract

Strategic decision making involves the active computation of costs and benefits. Though classical economic theory assumes perfect rationality, it is far from the truth. The priming effect largely affects rational decision making subconsciously, and even subtle stimuli can cause significant implications. This paper explores the effect of cultural bias on priming, as well as the malleability of the effects depending on the priming agents. Through research, it has been found that priming significantly affects one’s altruistic behaviours, positively or negatively affecting their decisions when playing strategic public good games. It has also been seen that the effects of priming through the same stimuli is dependent on one’s experiences and conceptions to their surroundings. Red, while usually acts as an aversive stimulus that decreases one’s risk preference and confidence outlook, has instead had the opposite effect on Chinese stockbrokers who are exposed to red as a positive stimuli. Thus, when used in practice in areas such as public relations, media, and advertisement, effects of subconscious stimuli should be considered under the context of the audience, especially for firms active multinationally.

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