How rational are we as consumers?
We began this semester with the economic belief in rational behavior:
Economic actors (people or firms) given perfect-information will equalize marginal costs and benefits in making decisions, such as whether to buy something, sell something, start a business or close a business.
However as we are going to see this week, we are not that rational. We are easily mislead by too many choices, the order of choices, time, loss vs gain decisions, and especially by the word “Free.”
Because I think you will find this interesting I have included some places where you can learn more about Behavioral Economics.
Check out these sources – OPTIONAL not required before class
Dan Ariely and Predictably Irrational
Richard Thaler and Nudge
Daniel Kahneman and Thinking, Fast and Slow
Daniel Pink and Drive
Crowd Control on National Geographic Channel
Brain Games on National Geographic Channel
Hidden Brain by Shankar Vendantam
Choice, Happiness and Spaghetti Sauce Malcom Gladwell Tedtalk
Unequally paid monkeys Frans de Waal Tedtalk
_____ Complete Test 2
_____ Read The Atlantic “Why you Bought that Ugly Sweater”
Focus Question: What are the irrational factors guiding behavior?