1.2.1 rational decision making

• rational producers aim to maximise their profits
• rational consumers naturally aim to maximise their utility
• factors causing irrational behaviours

  habitual behaviour

  social norm

  impulse buying

  computational weakness
• habitual behaviour 


  tendency to stick to thrift habits of consuming certain stuff
• social norm


  being influenced
• impulse buying 


  buying something out planning or having need
• computational weakness 


  difficult to calculate the benefit which the good brings to consumer
• bounded rationality 


  consumer ending up making satisfactory decision rather than optimal bcs their rationality is limited