101 Economics - Consumer Theory Easily Explained - 2732 Words

CONSUMER THEORY: THE NEOCLASSICAL MODEL AND ITS OPPOSITE EVOLUTIONARY ALTERNATIVE by Valentino Piana (2003) From http://www.economicswebinstitute.org/essays/consumertheory.htm The standard textbook model of consumer is an outstanding example of the neoclassical paradigm in economics [1]: a h y p e r-rational agent maximises something by choosing an optimal bundle of things. Here, the hyper-rational consumer maximises utility (i. e. an overall generic measure of well-being) by exhausting a given budget. He has a pre-defined income to spend on - for simplicity s sake - two goods, called X and Y, respectively. He could spend his entire income buying only X, thus purchasing a quantity of X equal to income divided by the†¦show more content†¦Choices are sequential. Information available to Neoclassical approach T h e c o n s u m e r h a s f u l l Limited information. consumer information about all existing products, their use and their effects on his welfare (utility). Degree of difficulty o f Zero. The choice is always C h o i c e c a n b e easy, the choice easy, with all pros and cons moderate or extremely already evaluated and difficult, d e p e n d i n g o n compressed in a monotonic the situation. measure (utility). I m p o r t a n c e advertising o f None. The consumer has its own tastes and they can t be changed. T h e l i m i t e d information of the consumer can be extended by advertising. Depending on the decision-m a k i n g s t y l e , advertising can have an important influence beyond the mere information. Importance of the opinion of others None. The consumer stands T h e c o n s u m e r c a n alone in her/his preferences. explicitly ask others or at least have contact with the opinion of others, who are stratified according to the relationship to th e consumer (e.g. friends, teachers,...). None. The consumer can receive i n s t r u c t i o n t o appropriately use the product and enjoy it better. The label can show third party certification of q u a l i t y , e . g . environmental friendliness b y ECOLABEL.Show MoreRelatedThe Logical Structure of the Service-Dominant (S-D) Logic of Marketing7412 Words   |  30 PagesMarketing Theory http://mtq.sagepub.com/ The logical structure of the service-dominant logic of marketing John Williams Marketing Theory 2012 12: 471 DOI: 10.1177/1470593112457745 The online version of this article can be found at: http://mtq.sagepub.com/content/12/4/471 Published by: http://www.sagepublications.com Additional services and information for Marketing Theory can be found at: Email Alerts: http://mtq.sagepub.com/cgi/alerts Subscriptions: http://mtq.sagepub.com/subscriptions Read MoreModern Medicine, Urban Medicine And Industrial Medicine2097 Words   |  9 Pagesenhance height, memory, speed, or stamina. Medicalization in the world, gets wider and abroad. Among other things, consumers choose a health insurance plan, health care providers, and a hospital. 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