Are Consumers Rational?
Are consumers rational?
Introduction
Last couples of decades have witnessed the change of emphasis on study of consumers behaviour. Nowadays it is universally acknowledged that consumers behaviour has gradually transformed from rational buying to progressively impulsive purchase (Holbrook & Hirschman, 1982). Individuals’ perspectives towards commodities were no longer merely a concentration on utilitarian functions, instead, social and psychological utilities have become a significant yardstick against products and services. Consequently, a variety of motives should be taken into account while studying buying choice. Under this circumstance, consumers were attached with irrationality which could spawn excessive purchasing.
Motivation
Initially, we should take a glance on why humankind are motived. A hierarchy to demonstrate how people seek to satisfy and prioritize needs states that people would serve primitive, physical and biological needs (eg.ease their hunger)first, transiting to belongingness needs then, with eventually a satisfaction of self-actualization needs (Maslow, 1943, cited in Baines et al, 2011:99).
Rational
Traditional assumptions commit a notion that consumers are rational. Viewed from a economic perspective, there are three predominant conceptions of rationality (Mele & Rawling, 2004). Firstly, the instinctive goal of a person is to optimize self-interest. At this stage, consumers would seek a path to the boost of self-interest. Secondly, von Neumann and Morgenstern (1953) pointed out that consumers are in a desire of maximum of utility. Thirdly, a well accepted statement argued by Simon (1958) as cited in Howard and Seth(1969), that consumers are under ‘bounded rationality’, that is, in brief,consumers behaviour are consciously rational, but the rationality is under constraint. In fact, researchers would assume consumers as rational due to the consumers’ lack of effective information as well as limitation of cognition
Introduction
Last couples of decades have witnessed the change of emphasis on study of consumers behaviour. Nowadays it is universally acknowledged that consumers behaviour has gradually transformed from rational buying to progressively impulsive purchase (Holbrook & Hirschman, 1982). Individuals’ perspectives towards commodities were no longer merely a concentration on utilitarian functions, instead, social and psychological utilities have become a significant yardstick against products and services. Consequently, a variety of motives should be taken into account while studying buying choice. Under this circumstance, consumers were attached with irrationality which could spawn excessive purchasing.
Motivation
Initially, we should take a glance on why humankind are motived. A hierarchy to demonstrate how people seek to satisfy and prioritize needs states that people would serve primitive, physical and biological needs (eg.ease their hunger)first, transiting to belongingness needs then, with eventually a satisfaction of self-actualization needs (Maslow, 1943, cited in Baines et al, 2011:99).
Rational
Traditional assumptions commit a notion that consumers are rational. Viewed from a economic perspective, there are three predominant conceptions of rationality (Mele & Rawling, 2004). Firstly, the instinctive goal of a person is to optimize self-interest. At this stage, consumers would seek a path to the boost of self-interest. Secondly, von Neumann and Morgenstern (1953) pointed out that consumers are in a desire of maximum of utility. Thirdly, a well accepted statement argued by Simon (1958) as cited in Howard and Seth(1969), that consumers are under ‘bounded rationality’, that is, in brief,consumers behaviour are consciously rational, but the rationality is under constraint. In fact, researchers would assume consumers as rational due to the consumers’ lack of effective information as well as limitation of cognition