Theme 1.2.10

Question 1

what are the reason why consumers may not behave rationally?

Answer 1

Consideration of the influence of other people’s behaviour( peer pressure)

the importance of habitual behaviour

consumer weakness at computation

Question 2

Explain habitual behaviour

Answer 2

Consumers often rely on habits and routines in their decision-making processes.

Habitual behaviour can lead to suboptimal choices if consumers do not reevaluate their decisions.

Question 3

Explain computational weakness

Answer 3

Some consumers may struggle with complex calculations or may not have access to the info needed to make perfectly rational decisions.

Limited cognitive abilities or info constraints can lead to suboptimal choices.

Question 4

Explain influence of other people’s behaviours

Answer 4

Consumers are often influenced by the actions and choices of others which can lead deviations from rational behaviour.

Social norms, peer pressure and conformity play a significant role in decision-making decision.

Question 5

Example of influence of other people’s behaviours

Answer 5

In fashion trends, consumers may purchase certain clothing items simply because they are popular or endorsed by celebs even if those choices don’t align w/ their individual preferences or rational utility maximisation

Question 6

Example of habitual behaviour

Answer 6

Many people have a habit of buying the same brand of toothpaste they have used for years without considering whether there are better or more cost-effective alternatives on the market

Question 7

Example of computational weakness

Answer 7

When comparing the cost per unit of different sized products, such as price per ounce of shampoo, consumers may find it challenging to calculate and compare value accurately leading to potentially inefficient choices.