1.2.10 Unit content Students should be able to: explain why consumers may not behave rationally: influence of other people’s behaviour the importance of habitual behaviour consumer weakness at computation

What do economists assume about consumers? Consumers are _________ and they: However, behavioural economics looks at why this may not be true.

Do consumers always act rationally?

What is the paradox of choice? Jam experiment What is the paradox of choice?

Microeconomics Topic 2c: The Allocation of Resources - demand and supply in a market Irrational behaviour Often it is the failure to forecast future feelings correctly which results in consumers not maximising _________   Consumers tend to ______________ the addictive nature of some consumption decision and they tend to ____________ impact of a present consumption decision. http://www.lse.ac.uk/publicEvents/pdf/20080317_ArielySlides.pdf

Microeconomics Topic 2c: The Allocation of Resources - demand and supply in a market Podcasts http://richmedia.lse.ac.uk/publicLecturesAndEvents/20080317_1830_behavioura http://viscog.beckman.illinois.edu/grafs/demos/15.html http://www.lse.ac.uk/publicEvents/pdf/20080317_ArielySlides.pdf