1.2.10: Alternative Views Of Consumer Behaviour

Question 1

What are the three main reasons for consumers not behaving rationally?

Answer 1

• Influences of other people
• Influence of habitual behaviour
• Consumer weakness at computation

Question 2

How do influences of other people cause alternative consumer behaviour?

Answer 2

• Individuals are influenced by social norms, known as bias; eg consumers may buy things to fit in or because someone else has it
• Herding behaviour occurs when an individual copies the actions of a large group eg the stock market, causing huge market bubbles

Question 3

How does the influence of habitual behaviour cause alternative consumer behaviour?

Answer 3

• Habits create a barrier to decision making since they limit or prevent consumers considering an alternative eg addictions with demerit goods (cigarettes, alcohol and drugs)
• Another habit many consumers have is buying their products at eye level so supermarkets tend to keep higher priced products near the top and lower priced products lower

Question 4

How does consumer weakness at computation cause alternative consumer behaviour?

Answer 4

• Many consumers aren’t willing or able to make comparisons between prices and so they will buy more expensive goods than needed, eg many consumers buy multi pack goods because they assume they are cheaper