1.1.2 - Economic Assumptions

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