1.2.10 Alternative Views of Consumer Behaviour

Question 1

How might other people’s behaviour alter a consumers behaviour?

Answer 1

Peer pressure
Social norms
Emotional factors

Question 2

How might habitual consumption be irrational?

Answer 2

There might be a better deal on but because you always buy the same thing, you are reluctant to take the deal and break your habit.

Question 3

Give an example where a consumer cannot make a rational decision due to a lack of information.

Answer 3

If a consumer sees a ‘buy one get one free’ deal, yet the product is perishable or doesn’t increase their utility then there would be no need to purchase it. They will use the rule of thumb to make a decision.

Question 4

Is giving to charity irrational?

Answer 4

Theoretically, giving to charity could be seen as irrational because the consumer would not gain any utility. However, a refusal to donate money would create a very negative image for the consumer which links to the social norms and peer pressure aspect of donating money.