https://padlet.com/rachna_shukla15/b18a6iipipoc Made with a bold sensibility en-us 2018-02-05 08:47:54 UTC 2023-09-19 09:43:12 UTC hello@padlet.com rachna_shukla15 https://padlet.com/rachna_shukla15/b18a6iipipoc/wish/2707434974 Are consumers inherently rational or predictably irrational ?

]]> 2023-09-17 14:44:33 UTC https://padlet.com/rachna_shukla15/b18a6iipipoc/wish/2707434974 https://padlet.com/rachna_shukla15/b18a6iipipoc/wish/2710310891 I believe that consumers are both inherently rational and predictably irrational, however I think that it depends on many factors such as a consumers real income, emotions, tastes etc. For example if a consumer has recently lost their job so they have no more income, then I believe that they become a lot more rational due to the fact that they have a limited amount of cash that can be used to purchase goods and services, whereas if a consumers has a high income job, lots of cash and they own lots of expensive properties (wealth effect) then I believe that they are more likely to be irrational and spend without thinking. Not just this, but I also believe it depends on the consumers background and upbringing as they can be from a poor background or a wealthier background.]]> 2023-09-19 07:10:58 UTC https://padlet.com/rachna_shukla15/b18a6iipipoc/wish/2710310891 https://padlet.com/rachna_shukla15/b18a6iipipoc/wish/2710514180 Consumers are predictably irrational,
The definition of rational is to have reason or understanding, it is evident this is something most consumers do not possess. An example of this is speculative buying, where without any understanding of the good, consumers may buy it with the hopes the price of the good may increase in the future, a good example of this is the buying of mortgage backed securities during the 2008 financial crisis before the December of 2007, firms such as the Lehman brothers bought trillions worth of mbs, however this irrationality caused them to go bankrupt as the prices did not continue increasing soon after they had bought it, another reason for this is the example of Veblen goods, where consumers may buy goods due to conspicuous consumption, at prices above their intrinsic value, such as iPhones, Thai is predictable and is evident in businesses when they increase the price of the good to make it seem higher quality, this does not guarantee highgher quality, and the customer is paying more than the utility offered by the good, therefor Ethel are irrational with their spending]]> 2023-09-19 09:38:28 UTC https://padlet.com/rachna_shukla15/b18a6iipipoc/wish/2710514180 https://padlet.com/rachna_shukla15/b18a6iipipoc/wish/2710515701 consumers are capable of rational decision making if they carefully weigh costs and benefits to make choices that align with their best interests. However, they can also show predictably irrational behavior due to emotions, and social influences, leading to decisions that stray from strict rationality. consumer behavior often falls on a spectrum between rational and irrational, with various factors influencing their choices. ]]> 2023-09-19 09:39:44 UTC https://padlet.com/rachna_shukla15/b18a6iipipoc/wish/2710515701 https://padlet.com/rachna_shukla15/b18a6iipipoc/wish/2710518615 I think consumers are more rational since they can be more systematic with their preferences and demands. Markets have an on-going cycle of having prices and features that have an effect on consumers. This causes individual and market demands to be more specific, causing more rationality. This is all dependent however, on the income of the consumer. Depending on the income, demands may shift, causing irrationality since demands are less specific. However this still proves that due to income and preferences rationality can be predictable. ]]> 2023-09-19 09:42:09 UTC https://padlet.com/rachna_shukla15/b18a6iipipoc/wish/2710518615 https://padlet.com/rachna_shukla15/b18a6iipipoc/wish/2710519739 Consumers can act in both inherently rational and predictably irrational ways. There are many factors that affect how consumers act in this way including the consideration of non-price factors such as for ethical and social reasons, tastes and preferences and the consumers income. When an individual consumes a good irrationally we assume that it is due to the idea that it does not affect their disposable income and they view the good as something with value so there is an increase in effective demand for that good. To some extent The Law of Diminishing Marginal Utility makes a consumer act irrationally as it suggests that they will consume until the price of the good is equal to the marginal utillity. The income effect also plays a significant role in how consumers act rationally as when the income of the consumer is higher the demand is therefore higher especially those that have a more affluent background who then have a smaller demand for inferior goods.]]> 2023-09-19 09:43:05 UTC https://padlet.com/rachna_shukla15/b18a6iipipoc/wish/2710519739 kyle205 https://padlet.com/rachna_shukla15/b18a6iipipoc/wish/2710519875 consumers are both inherently rational and predictably irrational as, consumers become more rational as the market researches become better at predicting the consumers behaviors and other outcomes due to their behavior/ opinions. Consumers rational is influenced by emotions and also at different moments/ points in time. Demand from a consumer/ individual demand is irrationally driven as, the consumer’s rational is influenced directly by their surroundings and the determinants around them, e.g., their (changing) ethics, their (changing) opinions/ tastes, as well as more predictable/ rational determinants such as seasonal change and the substitution effect. Overall while consumers maybe be occasionally rational the majority of the time consumers are predictably irrational. ]]> 2023-09-19 09:43:11 UTC https://padlet.com/rachna_shukla15/b18a6iipipoc/wish/2710519875