1.2.10
Alternative views of
consumer behaviour
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a) The reasons why consumers may not behave
rationally: o consideration of the influence of
other people's behaviour of the importance of
habitual behaviour o consumer weakness at
computation
We assume that Consumers are rational. But this is not always the case.
Sometimes it is the failure to forecast future feelings that leads to irrationality
Consumers are often tempted by the addictive nature of their consumption – this doesn’t
result in maximum utility.
The Paradox of choice is the idea that if a consumer has too much choice for example with
jam then they are less likely to purchase a jam than if they have a smaller selection.
http://richmedia.lse.ac.uk/publicLecturesAndEvents/20080317_1830_behavioura
http://viscog.beckman.illinois.edu/grafs/demos/15.html
https://www.youtube.com/watch?v=JaKMimJPxyA - 60 second adventures in economics:
Rational Choice Theory
Why Consumers act irrationally:
Personal desire over utility
the human mind has limited ability to process and evaluate information
the information available is invariably incomplete and often unreliable
the time available in which to make decisions is limited