2.4 CRITQUE OF THE MAXIMIZING BEHAVIOUR OF CONSUMERS AND PRODUCERS

Question 1

Behavioral Characteristics of Econs (Non-existent, according to Thaler)

Answer 1

1. Are rational
2. Have perfect information
3. Are extremely intelligent, and able to perform complex calculations quickly
4. Seek to maximize their own utility
5. Make decisions based on their own self. interest
6. Have consistent preferences over time
7. Have no self-control problems
8. Are unbiased

Question 2

Behavioral Characteristics of Humans

Answer 2

1. Have bounded rationality
2. Have incomplete information
3. Are not as intelligent as Econs
4. Have limited ability to carry out complex calculations
5. Are social beings, and make decisions in a social context
6. Change their tastes over time
7. May have self-control issues