Rational consumer choice

Assumptions

Consumers are always rational, want to maximise their utility and have perfect information.

Behavioural economics

Bounded rationality

Assumes rational decision making is limited because of an individual's thinking capacity, availability of information and lack of time available to get information and make a judgement

Bounded self-control

Suggests that individuals have limited capacity to regulate their behaviour and make decisions on impulse

Bounded selfishness

Recognises that individuals do things for others without a direct reward

Imperfect information

Challenges the fact individuals have perfect access to information for all their goods and services