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Topic: Consumer theory

Ads by Google      Human Rational Behavior and Economic Rationality For example, the questionable expansions of the neoclassical theory of economic, including consumer, rationality as utility maximization into other fields only further expose what is deeply wrong with this theory in the first place (Ackerman 1997:652). Thus, some economists and rational choice theorists consider this tautological property of un-testability a major advantage of their theory arguing that “there is no need for direct tests of the fundamental postulates in physics [...] or in economics-- the laws of maximizing utility and profit” (Machlup 1963:167). First, the metaphorical [non-economic] market is less responsive to the wishes of whoever the ultimate consumer may be than is the actual market in goods and services. http://www.sociology.org/content/vol7.2/02_zafirovski.html   (11781 words)      Neoclassical economics - encyclopedia article about Neoclassical economics. Utility maximization is the source for the neoclassical theory of consumption, the derivation of demand curves for consumer goods, and the derivation of factor supply curves and reservation demand. The emphasis is on microeconomics Microeconomics is the study of the economic behaviour of individual consumers, firms, and industries and the distribution of production and income among them. It analyzes firms both as suppliers of products and as consumers of labour and capital. http://encyclopedia.thefreedictionary.com/Neoclassical+economics   (3943 words)      Consumer - Wikipedia, the free encyclopedia In standard microeconomic theory, a consumer is assumed to have a budget which can be spent on a range of goods and services available on the market. In time-series models of consumer behaviour, the consumer may also invest a proportion of their budget in order to gain a greater budget in future periods. Under the assumption of rationality, the budget allocation is chosen according to the preference of the consumer, i.e. http://en.wikipedia.org/wiki/Consumer   (346 words)      Theory of Demand If the marginal utility were high then the consumer would be willing to pay a higher price, if marginal utility were low then the consumer would be willing to pay only a lower price. Utility theorists assume that consumers have full information and can make rational decisions about which products will grant them the most utility. Equalizing particular marginal utilities, given price (not only in dollar terms but also in total opportunity cost), is the generalized view of consumer equilibrium. http://krypton.mankato.msus.edu/~renner/tod.htm   (346 words)      Model of consumer behaviour (from consumption) --  Encyclopædia Britannica The theory and measurement of consumer behaviour forms an important part of modern economic theory. in economics, the difference between the price a consumer pays for an item and the price he would be willing to pay rather than do without it. in economics, relationship between consumer spending and the various factors determining it. http://www.britannica.com/eb/article-34252   (898 words)      Collective action The theory explores the market failure s where individual consumer rationality and firms' profit-seeking do not lead to efficient provision of the public goods, i.e. Besides economics, the theory has found many applications in political science, sociology, anthropology and the protection of the environment. The foundational work in collective action was Mancur Olson 's 1971 book The Logic of Collective Action: Public Goods and the Theory of Groups. http://www.serebella.com/encyclopedia/article-Collective_action.html   (971 words)      Great Depression. George Bush vs Einstein on economic policy The measure of consumer confidence dropped to about 79 per cent, and the retailing sector has been heavily hit in the recent rounds of job cuts, and this after a dismal Christmas retailing season, where sales were generated through deflationary price cuts, generating lower profits for the retailing sector. Jobs are the linchpin of both consumer confidence and consumer spending. Now the White House press Secretary stated that the President believes that ‘trickle down' theory is the best way to ‘create jobs', this being the latest bait and switch propaganda technique being used to peddle the tax cuts (the Republicans changing propaganda used to peddle agendas the way others change shirts). http://www.awitness.org/journal/great_depression.html   (971 words)      MicroQEDprogram.doc Consumer theory (8 lectures) Reading: MWG 2A-D, 1B, 3A-D, 2E, 3E, 3G, 3I, 4B Topics: The basics of economic analysis, introduction to the consumer problem, classical demand theory, properties of utility and demand functions, solving the consumer problem, welfare evaluation, aggregation, consumption with endowments, consumption over time. Producer theory (3 lectures) Reading: MWG 5 Topics: Production sets, production with a single output, cost minimization, the geometry of cost functions, aggregation, efficient production, constant returns technologies. Evaluation will be based on a combination of the midterm exam (30% of the grade), the final exam (60% of the grade), and the problem sets (10% of the grade). http://merlin.fae.ua.es/iturbe/MicroQEDprogram.doc   (950 words)      Family Resource Management 741 Theories from other disciplines such as psychology may be relevant to analysis of why consumers do not maximize utility, but extensions to economic theory over the past 30 years have provided powerful methods of analyzing even seemingly "irrational" behavior. Each student will choose a different topic (must be approved in advance by me) involving a consumer or family choice under uncertainty or risk. Consider some empirical analysis of consumer or household behavior, demonstrate that behavior is not consistent with a rational model, and show how the behavior might be consistent with some behavioral model such as the models discussed in chapter 9 of Plous. http://www.hec.ohio-state.edu/people/shanna/741/syl.htm   (1007 words)      Course Info The purpose of consumption theory is to a) prove that consumers are rational. consumer surplus -- the value that the consumer places on a good minus the price paid for it. c) some consumers are unable to purchase their desired quantity. http://www.eco.utexas.edu/admin/syllabi/303.html   (3141 words)      The Finnish Journal of Business Economics - 1 / 97 Consumer behaviour in environmental matters has usually been discussed within the framework of individual utilitarian choice theory or its later version, the expected utility or attitude-behavior theory. Consumers' decisions in environmentally relevant issues require self-reflection of their own preferences and priorities as well as public discussion and consensus about which social norms are necessary and justified to improve the environment, and finally consumer's decision whether to cooperate or not with these norms. he article describes difficulties of applyingtraditional consumer models and concepts of economic rationality to environmentally relevant choices. http://www.hkkk.fi/~lta/97/1/S1.html   (299 words)      Marginal Utility In order to maximize total satisfaction, the consumer must consume products in such combination that the marginal utility/price of each good is equal. = MUn/Pn) While it is true that measuring marginal utility is at best difficult, the consumer does have an inherent feeling regarding the marginal utility received from each good or service being consumed. To a degree, the current health care crises in the United States is related to third-party payment of health care and to the marginal utility maximizing principle. http://servercc.oakton.edu/~jbremer/health.htm   (299 words)      Eastern Economic Journal: $9.99: Can "just-below" pricing be reconciled with rationality? In a world in which information is costly, consumers may interpret price endings as a signal of such things as quality of the product [Whalen, 1980; Bolen, 1982; Alpert, 1971] or whether the product is low priced [Dodds and Munroe, 1985; Simon, 1989; Kotler, 1988; Nagle, 1987; Berman and Evans, 1986]. Many of these hypotheses have a common theme: price endings may be used by sellers to convey information to consumers. Not only is it one of the first topics explained in a principles course, but the entire field of microeconomics is often referred to as "price theory." It is therefore surprising that economists have largely ignored one of the most prevalent pricing practices, the disproportionate use of prices ending in the number nine. http://www.findarticles.com/p/articles/mi_qa3620/is_199604/ai_n8734053   (1476 words)      Consumer Revenge This is a good idea in theory, because Small Claims Court was set up to protect the consumer and others in disputes where problems can be resolved without your having to hire a lawyer. Meanwhile, businesses are setting up policies making it harder and harder for us consumers to even have a right to ask for a refund. As just one example of how bad things are getting, The Federal Trade Commission reports consumer fraud complaints doubled last year, from the previous year. http://www.Consumer-Revenge.com   (1476 words)      Marx & Value The value to the consumer of the last unit consumed (the marginal unit to the marginal consumer) - which, because of declining marginal utility, is the least valuable unit of that product consumed - is equal to the cost of the last unit produced (again, the marginal unit). It is to some extent true that labourers are produced as commodities for profit (supply of their training, recreation, and so on may be influenced by commercial considerations), but not true enough to make the labour theory of value realistic as an account of wages. Labour could not be an invariant standard of value when some industries used lots of labour and little capital while others used lots of capital and little labour, since a change in the distribution of income between wages and profits would alter costs in different industries by different amounts. http://www3.sympatico.ca/saburns/pg0950.htm   (15547 words)      Marginal utility - Wikipedia, the free encyclopedia In economics, marginal utility is the additional utility (satisfaction or benefit) that a consumer derives from an additional unit of a commodity or service. Whatever the neurological basis, the result of diminishing marginal utility is that rather than having a lot of one good or a lot of another one, one prefers having some of both. For example, the marginal utility of one slice of bread offered to a family that has five slices will be great, since the family will be less hungry and the difference between five and six is proportionally significant. http://en2.wikipedia.org/wiki/Marginal_utility   (15547 words)      SSRN-Competition and Innovation in the Consumer e-Payments Market? Considering the Demand, Supply, and Public Policy Issues by Brian Mantel, Timothy McHugh First, this paper provides strong support for Hirschman (1982)'s "bundle of attributes (consumer rationality)" theory. In this vein, the paper analyzes several consumer e-payment infrastructures currently in place - some owned by banks, some owned by independent third parties and provided to banks, and some owned by non-banks - which provide a platform for innovation by both financial institutions and non-traditional providers. Significant debate has occurred over the last several decades regarding whether there is adequate competition and innovation in the non-recurring consumer payments segment of the banking industry. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=298388   (692 words)      Results for 'rationality reason' rationality game theory to the case of bounded rational agents. rationality is that the social political nature of the IT investment process has largely been neglected in previous research on IT business value. rationality, limited resources, and imperfect knowledge of the world and the... http://odysseus.ieee.org/ieeesearch/query.html?qt=rationality+reason   (1934 words)      prospect theory Consumer and producer surplus Consumer price index Consumerism Consumer theory Cost Cost push inflation Cost-of-production theory of value Creditary economics Cross elasticity of demand... The theory also covers utilities, the goverment garunteeing of loans... LIBM theory LIBM Theory in Economics stands for the Legislatively Infallible Business Model Theory, which attempts to describe the effects of when... http://www.wikisearch.net/prospect+theory   (1934 words)      Quarterly Journal of Business and Economics: Consumer rationality and the status quo.@ HighBeam Research Received microeconomic theory presumes rational consumers maximize utility over all commodity bundles. Recent analysis, however, suggests that a consumer's status quo may limit economic rationality, "bias" consumer decisions, and induce serious errors in survey-based valuations of public and private goods. Using regression and choice-theoretic frameworks, we investigate the existence of status quo effects in the consumer valuation of a particular unpriced product--the reliability of residential electrical service. http://www.highbeam.com/library/doc0.asp?DOCID=1G1:13799857&refid=holomed_1   (208 words)      General equilibrium Anglo-American economists became more interested in general equilibrium in the late 1920s and 1930s after Piero Sraffa's demonstration that Marshallian economists cannot account for the forces thought to account for the upward-slope of the supply curve for a consumer good. Calculating the equilibrium price of just one good, in theory, requires an analysis that accounts for all of the millions of different goods that are available. The Marshallian theory of supply and demand is an example of partial equilibrium analysis. http://www.fact-index.com/g/ge/general_equilibrium.html   (208 words)      Towards An Understanding Of The Global Market System: A New Perspective For Economics All this would not be denied by the critics of the liberal demand theory; in essence, their point had always been that the assumption of rational consumer behavior as the foundation stone and justification of the laissez-faire ideology was false. In his theoretical framework the consumer is not considered to be a passive maximizer of the utility of market goods; instead, he/she proceeds from the idea of private households as producing units which combine market goods and (non-working) time to produce so-called „basic commodities”—commodities to be consumed directly. Sure, the consumer (according to Becker) is not manipulated; he/she is behaving quite rationally, but on an elaborated level which does not always make it opportune to spend much time and effort for a complex decision process when it comes to, say, making the choice for a chewing gum. http://theoryandscience.icaap.org/content/vol001.001/03rolf.html   (5248 words)      Marx & Value The value to the consumer of the last unit consumed (the marginal unit to the marginal consumer) - which, because of declining marginal utility, is the least valuable unit of that product consumed - is equal to the cost of the last unit produced (again, the marginal unit). And this of course is the plausibility of the labour theory of value: it treats labour, the foregoing of leisure, as the cost of anything, in the last analysis. If the value of one hour of labour is $1.00 (but the purchase price of one hour of labour is $0.60) the capitalists of industry 'A' each earn a profit of $8.00 by paying $12.00 for labour which adds $20.00 to the value of the product. http://www3.sympatico.ca/saburns/pg0950.htm   (5248 words)      Gottheil SG Marginal Utility and Consumer Choice Some other new concepts that are presented in this chapter to help us understand consumer choice include the law of diminishing marginal utility, consumer surplus, and interpersonal comparisons of utility. We'll find that the explanation for the law of demand lies in the concepts marginal utility, total utility, and the marginal-utility-to-price ratios for different goods. · Relate the concepts total utility and marginal utility to each other. http://www.swcollege.com/bef/gottheil/marginal_utility.html   (5248 words)      Herman Schwartz - Public Choice Theory Whether or not public choice theory accurately captures the motivations of public sector workers and consumer groups, the process of reorganization has changed the political terrain on which they stand by changing the 'incentive structure' they face. The public sector's share of GDP has risen to about 39 percent as the government balanced the budget 'upwards' via tax increases, but net of interest payments it has fallen. The information asymmetry between public sector workers as agents and the government and society who presumably are their principals means that public sector workers can use their highly 'asset specific' institutional knowledge (Williamson 1985) to deceive their principals about bureaucratic processes. http://www.people.virginia.edu/~hms2f/pubchoic.html   (10329 words)      Lecture 102-1 Theory and history show that as a result of an evolution lasting for centuries if not millennia, gold has become the most saleable as well as the most hoardable asset. The marginal consumer is the first to refuse to buy the uptick in price, and horizontal arbitrage means that he is ready to buy a cheaper substitute. The bid price is determined by marginal profitability. http://www.goldisfreedom.com/lecture102-1.htm   (10329 words)      Economics First, in the chapter itself, we look at utility theory: what utility is, how individuals set about maximizing utility, how decisions between goods can best be made, and how all this relates to consumer demand and the downward-sloping demand curve developed in Chapter 3. If the cost of a good is zero, then according to marginal utility theory, individuals would consume these goods until the marginal utility of consuming those goods was zero. Marginal Costs —Marginal cost is the additional cost of producing another unit of a good. http://www.whcbridge.com/ec1190.html   (10329 words)      Does Consumer Irrationality Trump Consumer Sovereignty? - Knowledge@Wharton Against this mounting body of negative evidence, economists' default belief in consumer sovereignty has been motivated primarily by theory rather than evidence. The goal of the present study is to see whether there is direct evidence supporting economists' faith in consumer sovereignty in a simple context. We address this question by presenting direct evidence that consumers' own purchases generate between 10 and 18 percent more value, per dollar spent, than items received as gifts. http://knowledge.wharton.upenn.edu/index.cfm?fa=viewPaper&id=1297   (114 words)      Marginal product (from theory of production) --  Encyclopædia Britannica The concept implies that the utility or benefit to a consumer of an additional unit of a product is inversely related to the number of units of that product he already owns. The theory's evolution in the 19th century was preceded by more than two centuries of observations of small life forms under the microscope. It states the amount of product that can be obtained from every combination of factors, assuming that the most efficient available methods of production are used. http://www.britannica.com/eb/article-34172?tocId=34172   (760 words)      Balanced Trade - Reconsidering the Classics: A new trade theory focused on national wealth. To compensate for this flaw the theory should be revised to say that trade increases consumer and producer welfare when the factors of production (capital, labor, land and entrepreneurship) are restricted to one country and therefore move to producing alternate goods within the same country. This trade theory is an alternative to the efficiency theory of free trade that is not protectionist, autarchic nor promoting of trade wars: it allows for the benefits from trade while providing a mechanism to reduce trade's occasional harmful consequences. Trade occurs when the relatively lower cost good in the more costly country is traded for the relatively lower cost good from the lower cost country. http://www.mkeever.com/essay.html   (760 words)

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