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CONSUMERS DO NOT ALWAYS MAKE
RATIONAL DECISIONS It's often assumed consumers always make buying decisions based on costs and benefits. It turns out personal biases and habits often divert them from what would seem to be rational thinking.
“In this field, we don’t
assume that people are perfectly sensible, calculating machines. Instead, we observe how people actually behave, and quite often our observations lead us to the conclusion that human beings are irrational.” THIS TYPE OF CONSUMER BEHAVIOR LED TO THE STUDY OF BEHAVIORAL ECONOMICS -DAN ARIELY-
FIFTH STOP: CLOTHES Annie checked
out the newest boutique in town. She noticed that their prices were much lower than at her favorite shop. She purchased a couple of blouses.
Once consumers have mentally established
a set price for a particular product or product type, their willingness to buy similar items depends on this “anchor price.” ACCORDING TO BEHAVIORAL ECONOMICS…
“It is true that from
a behavioral economics perspective we are fallible, easily confused, not that smart, and often irrational. We are more like Homer Simpson than Superman. So from this perspective it is rather depressing. But at the same time there is also a silver lining. There are free lunches!” - Dan Ariely -
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