BOUNDED RATIONALITY AND CONSUMPTION: NEEDS, WANTS AND CONSUMER DECISIONS
Keywords:
Behavioral Economics, Bounded Rationality, Consumption, Needs, WantsAbstract
Economic models are based on the assumption that individuals behave perfectly rationally. However, in the real world, it is observed that people do not act with perfect rationality. Behavioral economics argues that individuals act with bounded rationality. This approach states that people have limited information, time and resources, as well as emotional and intuitive tendencies. Neoclassical economics, based on the principle of perfect rationality, assumes that individuals have full information and act in their own self-interest. However, this assumption ignores individuals' emotional factors or unconscious processes. For example, the prisoner's dilemma in game theory shows that even when individuals act in their own self-interest, it can lead to the worst outcome for the community.
Today, consumers make decisions under the influence of many factors. Neoclassical economics may fail to reflect this complex reality. Behavioral economics recognizes that people act with bounded rationality, and this concept implies that consumers face constraints in making their decisions. This serves the purpose of making economic models more relevant to the real world.
Finally, the collaboration of disciplines such as economics, sociology and psychology allows for a more comprehensive study of human behavior. Behavioral economics argues that economic decisions are also shaped by psychological, sociological and physiological factors. In this study, the foundations of consumer behavior and its relationship with bounded rationality will be discussed in detail.
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