Cognitive Biases in Consumer Decision-Making: An Empirical Study of Purchase Behavior in the Cosmetic Market

The objective of this thesis is analyzing the decision-making processes that guide cosmetic market consumers to the final purchase. The cosmetic market is relevant for many economies and it is constantly growing, resisting even to economic fluctuations. It is one of the most dynamic markets and it positively influences many other correlated sectors. For this reason, a deep analysis of the historical evolution and the dynamics that characterize it is done in the first chapter, in order to understand how and why consumers' behavior influences companies' strategies and vice versa. This project, then, focuses more on its main objective with a theoretical part, in which theoretical models, cognitive biases, and their application to the market are considered. In the second chapter the most known decision-making models, including the theory of bounded rationality, the habitual model and the impulsive behavior are analyzed. This part helps to understand which are the different approaches that consumers assume to make choices, with a focus on the application of them to the cosmetic industry. It is known that individuals make decisions that are not exclusively rational due to systematic deviations in their thinking processes. These errors are the cognitive biases that are successively studied in the third chapter, such as the confirmation bias, the anchoring effect, the halo effect and the bandwagon effect. Finally, the empirical part of the thesis is based on the analysis of hypothetical purchasing experiences through a questionnaire. This allows readers to assess what has been discussed through the thesis and to observe typical behaviors and mechanisms that are imperceptible or not evident during the buying process.