The hypothesis of rational consumer behavior is very interesting and amusing. It can be useful for both an ordinary person and an entrepreneur.
general information
Now it is difficult to find a person who would not believe that everything in the economy revolves around the consumer. This is the norm for the development of the economic sector. It is believed that each individual person knows what he needs. When the economy satisfies his needs, then it works best. Ultimately, it is the decisions of individuals to purchase this or that product that form. Thus, we influence the volume of real sales and the level. In economics, such a phrase as the rational economic behavior of the consumer is used to refer to this process.
What is the point?
When a consumer enters the market, he tries to satisfy his needs as much as possible and get the highest level of utility when using a certain good. It should be noted here that both the individual and the manufacturer are not absolutely free in their choice. It is necessary to take into account not only the available but also the income that is available. Services, goods, and other competitive factors also have their influence. Therefore, the rational behavior of the consumer and the producer is aimed at obtaining the maximum possible utility under limited conditions.
Principles
The theory of rational consumer behavior is a component of microeconomics. The analysis assumes that the behavior of the individual is rational, that is, maximum satisfaction is achieved with a limited budget. Most important in this is the principle of maximizing utility. It is considered basic in human behavior and in determining his choice. A small terminological clarification: utility is the ability of a certain good to satisfy the specific needs of society or an individual. It is directly related to their characteristics, among which quality plays the most important role. In addition to it, durability, appearance, ease of use, comfort, luxury, and the like have a significant impact. Another important principle that influences rational consumer behavior is human sovereignty. That is, as far as it is not subject to external influence. So, every person should eat well to be healthy and active. Let's say that a touchscreen phone has appeared on the market, which many consider to be a status phone. And a person has a choice: buy an expensive and not very necessary thing and then eat for six months anyway, or do without such a little thing and spend money on food and other useful things. If he chooses the first option, then there is no need to talk about the rational behavior of the consumer. Examples of such an attitude are very numerous, and these people are dealt with by advertising specialists.
Theoretical component
There are two main approaches:
- Cardinal theory of utility. Also known as the quantitative approach. Puts forward a hypothesis about the possibility of measuring the utility of goods. The main bet is made on the quantity (in pieces, liters, kilograms, and so on).
- Also known as the ordinal approach. Defends the point of view according to which it is possible to rank the usefulness of a person. Usually a system of reckoning from best to worst is used. At the same time, the quantitative comparison of the utility of goods is rejected. Such an analysis is based on a certain set of a small number of initial hypotheses, on the basis of which indifference curves are built and the consumer's optimum is calculated.
Common features
The hypothesis of rational behavior is possible due to the existence of a unifying framework for all people. For example:
- The average consumer has a system of preferences.
- Demand is significantly affected by the presence/absence of related products.
- Everyone wants to maximize their utility.
- The demand of a particular consumer depends on his level of income.
effects
We are interested in rational consumer behavior. The action plan of each individual person provides for activity within the framework of his system of preferences. But it is extremely difficult to take into account specific values here due to consumer interaction effects. Let's look at what types of them exist:
- In this case, it implies the creation of a situation where the purchase is made solely in order to emphasize one's social position.
- By this is meant a situation where purchases are made defiantly and emphatically, which make it possible to highlight the position of a person. Typically, this refers to the purchase of goods that are extremely expensive and not available to most people.
- The perceived quality effect. This is a situation where goods with the same characteristics are sold at different prices in different stores.
- The effect of joining the majority. It is an expression of the desire not to yield to other people who are more "successful" in anything.
- Irrational demand. A purchase is made only because it was made by some other person who has a significant influence on the buyer.
- speculative demand. Occurs when there is a shortage of goods.
Let's say a word about manufacturers
Their success and failure depend entirely on the combined behavior of all consumers. Thus, we can influence even large enterprises. Let's consider such an example. There was a company that produces quality products. Over time, she literally “captures” the market, since her products have very high performance. When it has a literal monopoly, it decides to lower the quality of its products while leaving the price unchanged. Over time, consumers will realize that something is wrong and stop buying products of this brand. And they will start switching to products from other manufacturers that offer the best balance of price / quality. Each person in such a situation votes with his wallet. With mass such phenomena, a break occurs in the situation on the market, and new players rise on it.
Conclusion
One of the rather significant shortcomings of the considered hypothesis is that the assumption that a person will act rationally is put at the forefront. Alas, this is not always the case. Often we spend money on various trifles, postponing important events in our lives for the future. Of course, this is not good. To avoid this state of affairs, you should consider every important step.
Test on the topic "Inflation" in preparation for the exam in social studies.
1. Task to reveal the meaning of concepts and their use.
What is the meaning of social scientists in the concept of "inflation"?
Drawing on the knowledge of the social science course, make two sentences: one sentence containing information about the types of inflation depending on the rate, and one sentence revealing any consequence of inflation.
Answer:
The meaning of the concept: inflation is a process of depreciation of money and a decrease in their purchasing power, manifested in an increase in the general price level;
1. Depending on the rate of inflation, inflation is conventionally distinguished as moderate (creeping), galloping, high and hyperinflation;
2. Under conditions of inflation, economic growth slows down, as firms become unable to purchase new, more advanced equipment.
2. Assignment for concretization of theoretical positions on examples.
Inflation complicates the activities of producers and consumers in a market economy. Illustrate with three examples the rational behavior of the consumer in conditions of significant inflation.
1) borrowing money, since in conditions of inflation the debtor always wins, he will have to return more "cheap money" compared to what he took;
2) investing savings in works of art, something that is less subject to depreciation;
3) acquisition of a plot of land, real estate;
4) investing in your own recreation, health, etc.
3. Task for solving cognitive problems.
In monitoring the socio-economic development of the country of S., the rate of inflation and its causes are recorded. As one of the reasons, the shortage of products, formed due to a sharp reduction in imports and an increase in exports of certain goods, is indicated. What are other possible causes of inflation? (List any three of them.)
1) imbalance of public spending and revenues;
2) state budget deficit;
3) a change in the structure of the market in the 20th century (the market has become oligopolistic, monopolies have a certain degree of power over prices, they are interested in price races);
4) the rise in prices requires an even greater number of banknotes for circulation, and each new portion of them leads to a new rise in prices;
5) an increase in state spending on financing national economic and social programs (defense system, education, ecology, assistance to the unemployed, maintenance of the state apparatus), etc.
4. Task for drawing up a complex plan on a given topic.
Make a complex plan for a detailed answer on the topic “Inflation and its danger to the economy.
1) Inflation is the process of depreciation of money.
2) The main sources of inflation:
A) an increase in nominal wages that is not due to an increase in labor productivity;
B) an increase in prices for raw materials and energy carriers;
B) increase taxes on producers.
3) Demand inflation and supply inflation.
4) Main types of inflation:
A) by the nature of the flow (open and hidden);
B) depending on the growth rate (moderate, galloping, hyperinflation).
5) Consequences of inflation for the economy:
A) a decrease in employment, a breakdown of the entire system of economic regulation;
B) depreciation of the entire accumulation fund and loans;
C) depreciation of real incomes of the population, reduction of current consumption;
D) decrease in investments;
D) money losing its value.
6) Measures to overcome inflation:
A) control over the issue of money, the withdrawal of excess money;
B) reduction of budget expenditures;
C) development of production, overcoming the recession in the economy.
7. Specificity of anti-inflationary measures in the Russian Federation.
5.Assignment for writing an essay.
“Inflation gives everyone the opportunity to feel like a millionaire” (A. Rogov).
Production is organically connected with consumption, it is carried out for consumption and determines its structure. In turn, the consumer, choosing goods and services, actively influences production, stimulating its development. The impact of consumers on producers in a free market and competition is so great that sometimes they even talk about "dictatorship of the consumer."
Consumers- these are those who purchase and use goods, order works and services for personal household needs, not related to making a profit. Each of us is a consumer, wanting to satisfy our needs in some way. The consumer is a firm, an organization, the state as a whole.
The goal of the consumer is to derive maximum utility from the consumption of goods and services. On the way to this goal, the consumer faces such restrictions as the family budget, prices, range of goods and services offered. Therefore, the consumer, like the manufacturer, is affected by limited opportunities. He also faces the problem of rational choice.
In countries with a command economy, the actions of the consumer, as a rule, are regulated. In the USSR, for example, the consumer was deprived of the freedom to choose housing, medical institutions, and some expensive goods (cars, furniture, etc.). In a market economy, freedom of economic behavior predetermines the sovereignty of the consumer, i.e., the right of the owner of any kind of resources to independently make decisions related to the disposal of these resources and their use.
Remember the diverse needs of a person: physiological, social, spiritual, needs for self-realization, security. These needs can be realized in different types of markets. For example, the need for goods and services - in the market of goods and services, the need for self-realization - in the labor market. In order to competently and rationally carry out consumer choice, everyone must have certain knowledge and skills.
A consumer who is interested in meeting his needs with the least expenditure of limited funds has to think about the following questions: what to spend his income on in the first place? How to choose a product or service of the desired quality and corresponding to its purchasing capabilities? How to reduce financial losses? How to save existing income? How to behave rationally in different markets?
Consider these questions on the example of consumer behavior in the market of goods and services. The consumer is one of the main actors in this market, he creates demand, through which the assortment, quality and price of goods are determined. But is it really that strong in this market? How to choose the right product? Quite often, consumers' information about a product is limited to knowledge about its functions or the expected positive effect from its use.
Let's say you want to buy a modern washing machine. Where to begin? It is necessary to evaluate the market for this product. First of all, study advertisements: what is the range of goods, where and at what price can you buy it. Then choose a specialized store where you can get information about the properties and quality of the goods from a qualified specialist (merchant manager, manager). You should be interested in the store where the goods are sold with the maximum warranty period, delivery and installation, and post-warranty service are provided. Do not forget to pay attention to announcements about sales days, discounts on goods. An analysis of all factors will help you make a rational, that is, with the greatest benefit for yourself, purchase.
As you can see, the rational behavior of the consumer when choosing a product or service usually involves a certain sequence of actions: awareness of the need to purchase, search for information about the product or service, evaluation of possible purchase options, making a purchase decision.
So you've made your choice. But can we always buy what we want? Alas, often we come across such a limiter of our opportunities as the level of available income.
You already know that a person can earn income from several different sources. The main sources of consumer income are wages, state social payments to individual citizens in the form of allowances, pensions, scholarships, income from entrepreneurial and other activities, income from property (payment received for renting your apartment or summer house, interest on money capital, dividends on valuable papers).
In many households, the income received is divided into two parts: one is for the purchase of goods and services necessary to meet the personal needs of people; the other part of the income is savings. This division does not depend on the forms and sources of income, but depends on its size. The more income a consumer receives, the more money he can spend on consumption. As income increases, so does the amount of savings. These dependencies are obvious. But economists have established other dependences of income and expenses: the higher the family income, the lower the share of expenditures on food and more on durable goods, and also the greater the share of savings.
A person's standard of living depends not only on the size of his salary or savings, but also on how wisely he spends money. Economists divide consumer spending into mandatory and optional. Mandatory expenses can be considered as the minimum necessary - these are the costs of food, clothing, transportation costs, utility bills, etc. If your personal income does not exceed the mandatory expenses, then you can hardly afford arbitrary expenses(for example, for a tourist voucher, purchase of books, paintings, cars, etc.).
Analyzing data on consumer spending in different countries, the scientists concluded: the richer the country, the smaller part of the personal income of its citizens goes to obligatory expenses. The German statistician E. Engel (1821-1896) was the first to establish a natural relationship between the income of the population and the structure of consumption. According to Engel's Law, the higher the income level of a family, the lower the share of its expenditures on food products. Accordingly, the demand for industrial consumer goods increases, and with a further increase in income levels, the costs of high-quality goods and services increase significantly. As we can see, the structure of consumption expenditures changes in direct proportion to the size of income.
According to the share of family expenses on food, one can judge the level of well-being of different groups of the population of one country and compare the well-being of citizens of different countries. In the US, the share of spending on food varies between 10-15%, and a significant number of Russian families spend on food from 40 to 48% of their income. (Think about how the economic situation in the country affects this indicator.)
Spend money today or save for the future? How to save and increase your income? These questions concern all consumers, whether it be a family or a company.
It is important for a rational consumer not only to spend money skillfully, but also to place their savings correctly. For these purposes, the consumer uses a savings account in a bank, receiving income from a deposit, or purchases securities (stocks, bonds), receiving dividends on them. (Note that the above is true in conditions of economic stability.)
Another reliable way to allocate savings, especially in a situation of economic and financial instability in the country, with a high level of inflation, is the purchase of real estate (apartment, house, cottage), the prices of which are growing faster than money is depreciating.
The form of placement of savings is also life, health, property insurance. Today in Russia there is a growing number of insurance companies and funds (mainly commercial) that provide the following types of insurance: voluntary medical insurance, accident insurance, business risk insurance, auto insurance, etc. Insurance is beneficial for both the producers of this service and its consumers.
Insurance means protecting you from possible damage by making periodic contributions to insurance companies that pay you money in the event of such damage. Let's consider this situation on a specific example.
Suppose you live and relax in the summer in a village built up with the same type of garden houses. The average price of a house is 120 thousand rubles. From the practice of past years, it is known that, on average, once a year, a fire destroys one house. This allows the insurance company to calculate how much money the victim will need to pay in the event of a fire (in our case, up to 120 thousand rubles), and add to them some amount to cover administrative costs and profits (for example, another 30 thousand). The resulting total amount (150 thousand rubles) is divided among all the owners of the houses, and each contributes his share, or insurance premium, to the general fund (if there are 100 owners, then each pays 1.5 thousand rubles). In the event of a fire, the owner of the burned-out house will receive compensation from the insurance company (up to 120 thousand rubles), and the company will receive profit. Thus, sharing the risk of possible damage with other people through insurance gives the consumer the opportunity to protect himself from financial losses.
Savings, if properly allocated, allow the consumer not only to have additional income, but also to make expensive purchases; savings are also needed in case of disability, paying for education and professional development, etc. (Give examples of savings in the household that confirm their need.)
When choosing options for the placement of savings, the consumer needs to compare them in terms of reliability, interest on income, liquidity (the possibility of easy conversion of savings into cash).
