Consumer rational behavior definition
- 1 Making choices on the basis of preferences.
In this sense a consumer is rational if he always chooses the feasible alternative that he most prefers.
The choice of an alternative that is not the best is irrational. 2 Possessing preferences that satisfy a set of axioms. What is a rational consumer behavior?
Economists argue that a utility maximizing individual is noted as a 'rational consumer' in the market.
Someone is considered as displaying rational consumer behavior when they are focused on their own self-interest; they maximize their utility in order to gain the most for themselves.May 18, 2020.
What is rational consumer behavior?
Someone is considered as displaying rational consumer behavior when they are focused on their own self-interest; they maximize their utility in order to gain the most for themselves.
As such, self-interest is the driving force of all decision-making.May 18, 2020.
What is the definition of rational behavior?
Rational behavior is used to describe a decision-making process that results in the optimal level of benefit, or alternatively, the maximum amount of utility.
Individuals who exhibit rational behavior make decisions that provide them with the highest amount of personal satisfaction..
- Rational behavior occurs when we are pursuing goals in accordance with our set preferences and priorities.
When a person does not behave in accordance with their preferences and priorities, their behavior is irrational. - The key aim of rational consumers is to maximise their own utility or satisfaction when making their choices.
Often this might involve some cost-benefit calculation. - weighing up the benefits and costs of allocating some of their limited budget to different goods and services.
What is rational consumer behavior?
Therefore, rational consumer behavior is such behavior that is based on the assumption that an individual strives towards maximum satisfaction with suitable (rational) use of means at their disposal, or an individual fulfils that goal by using a minimum outlay of means or by reaching the greatest efficiency
×Consumers exhibit rational behavior when making logical decisions based on the information available. This includes weighing the costs and benefits of their choices and selecting the option that best meets their needs and preferences. There are several assumptions of consumers' rationality, including that consumers have to choose the best alternatives using a limited budget, consumers' choices are independent, consumers have fixed preferences, and consumers can gather all the information and review all alternative choices.
