Classical Theory Of Consumer Behaviour
Consumer behaviour, in a nutshell, is the study of human action to decipher what processes they use when purchasing or selecting goods and services. It has long been a topic of study by economists, classical and non-classical, and with the added input of psychology later on, it has continued, and will continue to be, a well researched and debated field. From the original concept of evolution by Darwin back in 1859 [7], we can take a look at how homo sapiens have further evolved into this modern world of consumerism, and whether the classical theories are still appropriate today.
The classical theories based their initial research on a rational, self-interested economic actor in the human environment, titled ‘homo economicus’, and driven
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Coming out of the war feeling battered and bruised, fear and ambiguity were no doubt at the forefront of people’s minds, and statisticians at the time thought that following this analytical path would assist in avoiding uncertainty. The first to seriously approach this topic was mathematician John von Neumann, who, in 1944, with the aid of economist Oskar Morgenstern, presented the notion of “expected utility” [31], which combined the notion of imagined events with probabilities. This, however, wasn’t enough. Expected utility was well received in some fields (most noticeably in the insurance and the investment industries), however also widely criticised in terms of business and economics, where they argued that the intellectual constraints of the human mind (the irrationality of man) made expected utility too romantic a notion to be used in terms of making meaningful, idealistic …show more content…
They were happy to adopt the new theories, incorporating the new ideals regarding behaviours and probabilities, and although they didn’t necessarily believe that everyone was constantly making the right decisions, they simply assumed that, in a democracy, rational behaviour would be more frequently dominant. Due to this general acceptance by economists, and the fact that they seemed to leave things untouched, the field was left wide open for research. Enter the psychologists. Following the release of Ward Edwards’ 1954 article, titled “The Theory of Decision Making”[10], and some further research on the subject, he concluded that people, although not precisely rational under the guidelines of decision analysis, were close enough most of the time for most
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