Micro: 1.2.10 Alternative views of consumer behaviour

Question 1

What do some behavioural economists suggest about consumer choices?

Answer 1

Consumers do not always make rational choices and economic theory should not assume rationality.

Question 2

How do consumer decisions often get influenced according to behavioural economists?

Answer 2

Consumer decisions are often influenced by the opinions of others, which might not lead to utility maximisation.

Question 3

What real markets can be used to explore irrational consumer behavior?

Answer 3

Real markets such as bank accounts and energy suppliers can be used to explore why consumers may not act rationally.

Question 4

What factors might influence consumers to act irrationally?

Answer 4

Consumers may be influenced by habit, inertia, or the need to feel value.