18 Understanding Rational Decision Making
year we submitted in our new advertising campaign, and we participated in the labor nego-
tiations which Aditya just went through. Currently, we are producing two products for the
commercial market inside the nation. A high sudser detergent, a medium sudser, and we’re
producing one product in the industrial market.
Right now, we have overall a 31% market share. And on a financial note net income
rose $6.9 million last year to $23.7 million this year. This was on an increase to retained
earnings of $22.5 million versus last year at $5.7 million. Much of this increase is due as
Bob mentioned to the additional capacity that we have with the factory, with the new
factory. It allowed us to do two things. One was to produce more goods for sale within
the commercial end of the business, and the other allows us to also get into the industrial
market.
Stock price rose from last year roughly at this time from the low 50s to almost $90 per
share right now. And earnings per share climbed from $6.96 last year to $23.68. Return on
investment for the year was 23%, and return on equity was 42%. So with that in mind, what
we would like to do is present to you our main concerns for next year.
Chairman of the Board: No. We would like to discuss that a little more. Do you have
any comparative numbers for the competitors in our nation? What did the competitors’ stock
prices do?
Student CEO: In our nation, Team 3, Yun Wang’s team is at $90 stock price and Brenda
Kelley, the third competitor, is at $110. I think it is. She’s number one in the nation and in the
world right now which is at $110. We are in at $90. We are sort of in the thick of things.Audience-Provided Benchmarks
Audiences sometimes compare recommended alternatives to personal or subjective standards or
benchmarks. A study of recruiters screening résumés for a supervisory position fi nds recruiters
use themselves as benchmarks: The more similar the applicant’s background is to the back-
ground of the recruiter evaluating that applicant, the higher the probability the applicant will
be hired.^84 Consumers often generate a subjective reference price for a product based on its
quality, and then evaluate different brands by comparing their subjective reference price to the
actual price.^85 A study of renters’ decision making gave renters descriptions of seven houses
with each house described in a separate booklet. Of all the comparisons the renters made, 71%
were comparisons to a subjective standard, the remaining 29% were comparisons among the
seven houses.^86
When comparative information about alternatives is missing from a document or presentation,expert audiences may supply it. Interestingly, the comparative information consumers retrieve from
their memories has a stronger effect on their decisions than comparative information provided
by external sources.^87 If consumers are unable to retrieve missing benchmark information from
their memories, they may attempt to infer it, especially when the information has high subjective
importance.^88
In a study comparing the effects of missing information on experts and novices, expert andnovice bicycle buyers received written descriptions of bicycles in which important comparative
information such as the weight of the bicycle was missing for some of the bicycles. Although
novices were unconcerned that information was missing, experts who understood the impor-
tance of the missing benchmark information tried to guess what it would be for each bicycle