1.1.2 - Economic Assumptions

Rationality

Rationality

Based on clear thought or reasoning

Maximising behaviour

To increase something such as profit, satisfaction or income as much as possible

Revenue

Money that a business receives over a period of time especially from selling goods or services

Choice overload

When consumers have too many choices finding it difficult to make a decision

Computational weakness

Consumers find it difficult to calculate probability of something happening

Myopia

When consumers are short-sighted when making a decision

Habitual consumption

Pattern of behaviour by consumers not changing as it is easy or comfortable

Herding

Following norms or people causing bad decisions to be made and not maximising utility