Examples of rational consumer behavior. The theory of rational consumer behavior. Human economics

Inflation is a characteristic feature of the economic history of all countries of the world. It is fundamentally transforming the rules of economic exchange and has a powerful impact on consumer behavior.
The rise in prices is one of the main factors of concern for Russians. To the question: "What problems of our society worry you most and do you consider them the most acute?" in January 1997, 55.1%, and in January 1998, 58% of the respondents noted an increase in prices. These are indicators of sentiment for a fairly stable period. The alarm is caused not by the rise in prices per se, but by their rise against the background of a lack of wage growth or slow rates of its growth.
During periods of rapid price growth in 1992-1993, since August 1998, this factor turns into the main headache for consumers, into a factor without which no economic decision is made.
The first phase of consumer reaction. “Experience shows that the population in general very slowly understands the situation and finds a way out of it. At first, the change in habits is even done in the opposite direction and facilitates the position of the government. The population is so accustomed to the idea that money is the final measure of value, that in the initial period the rise in prices it considers it transitory and therefore saves money and refrains from spending in the belief that it has become the owner of a greater real value in monetary form than before. " This is how the classic of English economic theory J. Keynes (Keynes 1993) described the reaction to inflation in this way in 1923.
The second phase of consumer reaction. “But sooner or later the second phase comes. The population becomes convinced that the owners of the paper bear a special tax and cover government expenses, and they begin to change their habits and try to minimize their paper cash” (Keynes 1993).
This is achieved in different ways:
(1) money is placed in various things, such as jewelry or household items;
(2) the population can reduce the amount allocated for household expenses and the average time during which these amounts are spent.
So, J. Keynes gives an example from the history of early Soviet Russia during the period of inflation: a merchant, having sold a pound of cheese, rushed with his rubles to the market to immediately replenish stock, exchanging money for cheese before it rose in price again. There was even an anecdote about a gentleman who, when ordering beer in a cafe, immediately ordered another glass, preferring to drink settled beer, but to avoid the risk of price increases. In Vienna during the same period, change offices were created at every step, where it was possible to change the local currency a few minutes after receiving it into Swiss francs (Keynes 1993). After 1992, Moscow and other large cities also began to shock them with the abundance of exchange offices, giving foreigners the impression that the whole country was about to go abroad.
In an effort to quickly get rid of money that is melting before our eyes, a part of the population finds itself in a situation where there is a regular acute shortage of cash to meet even the most urgent needs. Here you have to borrow, but who gives loans during inflation, without sacrificing their own interests?
Another consequence of the desire to get rid of cash is that goods, usually acquired as a result of more or less long-term savings, become unavailable. All the money is spent on current consumption, on little things, sometimes even completely unnecessary, which can be bought immediately after receiving a salary.
This interest in "getting rid of money" also leads to the desire to buy many consumer goods in large batches, which makes it possible to get away from inflation and not face the problem of hunger. Most often this is the purchase of food for future use.
In general, the behavior of people during inflation resembles their behavior during the period of domination of the administrative system with its characteristic deficit: both here and there there is a desire to turn their money of little value into a commodity. However, there is also a significant difference: inflation in the market economy significantly limits demand by constantly growing prices, preventing a total shortage.
The natural consequence of inflation is the flight from inflationary money by converting it into a stable foreign currency. As a result, foreign currency acquires the functions of a means of payment in foreign territory, functions of a store of value, etc. In the face of inflation, the demand for gold and other jewelry, used as a means of accumulation and flight from inflation, increases sharply.

Is competition a good thing or a bad thing? What makes people use loans, overpaying interest to the bank? How to ensure that our expenses are not more than income? All these questions are answered by the section of economics that studies the rational behavior of producers and consumers in the modern world.

Human economics

From the point of view of this science, all types of human behavior are divided into four types - production, distribution, consumption and exchange. The economic system itself is based on production, the purpose of which is to generate profit through the exchange of goods for money. The flip side of this coin is consumption. It is due to a certain law called "rational consumer behavior", which means thoughtful and dictated by reasonable reasons.

The actions of the consumer and the producer as two interdependent aspects in the economy

Production and consumption are interrelated processes that regulate each other. Rational behavior of a consumer, employee, owner, family man, citizen proceeds from decision-making that is consistent with the income of each economic entity. The consumer not only chooses one or another market offer, but also influences the producers by his choice (or lack thereof). In some areas of the economy, competition is so strong that marketers have introduced the concept of "consumer dictate". Indeed, in the competitive race, only those entrepreneurs who have been able to understand well the typical features of rational consumer behavior - their client - survive.

The consumer as a driving factor

So, a consumer is someone who is a subject of consumption: he buys, uses a product or service. In fact, this is any representative of humanity, but also legal entities, associations, etc. The purpose of consumption is to extract the maximum profit from the use of the product. The constraints in this case are prices, budget, assortment, etc. Due to their action, both the consumer and the manufacturer are forced to develop certain strategies of behavior or rational choice.

The usefulness of rational consumer behavior for the economy also depends on the type of economic and economic activity of the country. If this is a command-administrative type, then the regulation of consumer choice is very high - for example, he cannot freely choose housing, car, medical services. If we are talking about a market economy, then the consumer has full sovereignty and independently makes decisions, disposing of his financial resources.

To each according to his needs

How broad our consumer needs are can be understood by remembering which of our needs we provide by choosing certain products: physiological, cultural, social, communicative, security or self-realization needs. Everyone has their own products and their own business niches that produce them. Knowledge of economics and marketing helps to make a choice when consuming something.

The bulk of the population of our planet are people with one way or another limited financial resources. Therefore, each of us had to think about the questions: "How to properly spend your finances? What should be purchased first, and what should be postponed for now? How to reduce costs? How to choose the best quality product or service at an affordable price?" All these questions are answered by the theory of rational consumer behavior. Next, we will consider the components of the considered section of the economy in more detail.

Stages of rational behavior

The first stage is understanding the need to acquire something. The second step is to search for information about the required product. Then comes the assessment and analysis of this information, all possible purchase options. And finally - making a decision.

In this regard, several types of financial spending are distinguished with rational consumer behavior: mandatory (minimum, most necessary) expenses - for food, clothing, travel, payment of utilities, etc. - and arbitrary: for hobbies, high-level goods, travel, etc. Another type is the savings of the subject in question.

Types of reasonable behavior of the consumer of goods and services from the side of the economy

The types of rational consumer behavior are divided into:

  • self-interest behavior;
  • behavior pursuing situational goals (immediately at the time of choice);
  • complete rationality, assuming that a person studies information on a product or service for a long time and maximizes the benefits obtained;
  • limited rationality, when the collection or analysis of information is difficult due to various reasons (physical, social and other factors);
  • formal (weak) rationality, especially if it is limited by factors that do not depend on the person.

Interaction effects

The plan of each individual subject provides for activity within the framework of his preferences. There are certain effects of consumer interaction:

The snob effect. A situation is created when the purchase is made to emphasize their social status.

The effect of joining the majority. Expressing a desire not to be worse than people who are “successful”. It is characterized by irrational demand. A purchase is made only because it was made by another person whom the buyer values \u200b\u200band respects. There is also a speculative demand arising from a shortage of goods.

The effect of presumptive quality. Products with the same characteristics in different stores are sold at different prices.

Veblen effect. A situation in which things are defiantly and emphatically purchased that have a very high price and are not available to most people.

Consumer Behavioral Analysis

An example of rational consumer behavior looks like this. Let's say you are thinking about purchasing a washing machine. First of all, you strive to evaluate all the possible offers on the market. You study advertisements, assortment, prices, unique trade offers (discounts, promotions, the possibility of free installation or delivery), reviews. As a result, you choose the store that offers the best (but not the lowest) price, while providing the maximum warranty period, free shipping, installation and post-warranty service. Another option: if you are extremely limited in funds, then do not pay attention to the warranty offers, but choose the machine at the lowest price.

Situational rational economic behavior of the consumer is illustrated by the following example. Suppose your phone is broken and you are waiting for an important call. You don't have time to study the market, one information is important for you - how quickly you can fix your gadget. Therefore, you choose the nearest repair service, whose master promises to fix your phone today. The price of such a service in this case fades into the background.

Rational manufacturer behavior

A producer is a person or organization that manufactures and markets goods or provides services with the aim of generating income from rational consumer behavior. The costs of acquiring production resources are called costs. Profit is formed by the difference between income and costs. Its maximum value is the manufacturer's goal. To increase profits, he seeks to lower production costs. This is facilitated by savings on raw materials, production equipment with new technology, reduction of electricity costs, etc. Each manufacturer answers for himself three main questions: what, how and for whom he produces his product or provides a service.

To determine what exactly to produce, an analysis of the demand market, rational consumer behavior in the desired sector of the economy, the cost of production and advertising, etc. is carried out. The volume of production and its methods are determined. For example, you can manually harvest a crop by hiring and paying a large number of workers, or use agricultural machinery by buying or renting it. Also, the manufacturer needs to decide for which segment of the population he releases his product. Thus, targeting the broad masses implies a larger volume of goods at a lower price than targeting social strata with above average incomes.

What does the manufacturer want?

In general, the rational behavior of the producer is the answer to the question: "How can one get the most profit from a limited amount of resources?" A particular version of this question arises when one or another entrepreneur comes to the need to expand - how, with the resources available to him, to increase the volume of output?

For example, this problem can be solved by expanding production volumes due to quantitative changes (increasing capacity, the amount of natural resources and workers used), or by improving the productivity (productivity) of resources. In countries with developed economies, they prefer to use the second way of solving the problem. It means an increase in labor productivity (the amount of goods produced in one unit of time by one worker). Against the background of the depletion of mineral resources and the rise in prices for products made from them, this path looks optimal.

How and by what means is the increase in labor productivity? First, specialization in some kind of activity helps. By performing the same small operation, the employee acquires better skills and his productivity increases. Secondly, the use of modern technologies makes it possible to increase the volume of production of certain goods over the same period of time. Thirdly, this factor is influenced by professional training and high-quality education of employees. The quality of products is closely related to the level of professionalism of those who work on it.

One study by a Brooklyn Institute scholar found that 28 percent of the increase in U.S. national income from 1929 to 1982 was generated by technological advancement, 19 percent depended on capital infusions, and 14 percent on increased worker education and training.

What conclusions can be drawn?

Thus, the behavior of consumers and producers is driven by reasonable reasons that provide the most successful economic strategy. A characteristic feature of rational consumer behavior is the comparison and analysis of market offers and the ability to make financial savings. And for the manufacturer, the most important thing is to find a balance between the costs of providing the market with its product or service and its price, keeping in mind the competitiveness of its niche and the actual demand for its supply.

Obviously, the main limitation for any consumer is the amount of his income. Since the needs are diverse and limitless, and the income (that is, the amount of money available to the consumer) is limited, the buyer is forced to constantly make a choice from the huge number of goods offered to him in the market. It is natural to assume that in making this choice, the consumer seeks to acquire the best set of goods available for a given limited income.

There is no objective criterion for determining which set of products is the best for a given consumer. And only because the consumer chooses the “best set” of goods from his individual (ie, subjective) point of view (remember the surprisingly accurate aphorism of K. Prutkov: “everyone thinks the best what he wants to do”).

Of course, the subjective approach is not flawless: a person is a complex creature and does not always behave rationally in the indicated sense. Of course, the idea of \u200b\u200bthe consumer's rationality simplifies the mechanism of his economic behavior, and nevertheless, most consumers really strive to get maximum satisfaction from their limited income.

It should be emphasized that to behave rationally in the market does not necessarily mean being tight-fisted and petty-calculating. One should not think that a person who has spent his fortune on “a million scarlet roses” for his beloved is an irrational consumer, while another who has deposited money in a commercial bank at high interest rates is, on the contrary, a rational consumer. The theory of consumer behavior recognizes both as a rational consumer, if only they really chose the best (from their subjective point of view) variant of consumer behavior. This means that each consumer has a kind of individual scale of preferences and, realizing it with a limited income, seeks to achieve the maximum possible degree of satisfaction.

Rational consumer behavior is to maximize utility with limited income.

Ticket

There are two main approaches to determining utility:

1) quantitative (cardinal). This is the traditional version of consumer choice theory;

2) ordinal (ordinal).

The utility that a consumer derives from an additional unit of good is called marginal utility (MU). In turn, the sum of the utilities of the individual parts of the good gives the total utility (TU). Then the marginal utility is the increase in total utility with an increase in the volume of consumption of the good by one unit.

General usefulness of the good

The total utility curve starts from the origin, since the need begins to be satisfied after a certain amount of consumption. This curve is positively inclined, since with the increase in the amount of the good, the total utility increases.

Using the cardinalist (quantitative) theory of utility, it is possible to characterize not only general utility, but also marginal utility, as an additional increase in a given level of well-being, obtained by consuming an additional amount of a given type of good and constant quantities of consumed goods of all other types.

Marginal utility

Most goods have the property of diminishing marginal utility, according to which the greater the consumption of a certain good, the smaller the increment in utility obtained from a unit increment in the consumption of this good. This explains why the demand curve for these goods has a negative slope. Figure 8 shows that for a hungry person, the usefulness of the first slice of bread they eat is high (QA), but as their appetite is saturated, each subsequent loaf of bread brings less and less satisfaction: the fifth loaf of bread will deliver only QB of usefulness.

Ticket

ORDINALISTIC (ORDERAL) USEFULNESS - subjective utility, or satisfaction that the consumer receives from the goods consumed by him, measured on an ordinal scale.

Ordinal (ordinal) utility theory is an alternative to cardinal (quantitative) utility theory.

Marginal utility cannot be measured; the consumer does not measure the utility of individual goods, but the utility of a set of goods. Only the order of preference for sets of goods lends itself to measurability. The criterion of the ordinal (ordinal) theory of utility involves the ordering by the consumer of his preferences regarding goods. The consumer systematizes the choice of a set of goods by the level of satisfaction. For example, the 1st set of goods gives him the greatest satisfaction, the 2nd set - less satisfaction, the 3rd set - even less satisfaction, and so on. Therefore, such a systematization gives an idea of \u200b\u200bthe preferences of consumers in relation to a set of goods. However, it does not provide an idea of \u200b\u200bthe differences in satisfaction with these sets of goods. In other words, from a practical point of view, the consumer can tell which set he prefers over the other, but cannot determine how much one set is better than the other.

Ordinal (ordinal) utility theory is based on several axioms. Note that there is no consensus among economists regarding the number and name of the axioms. Some authors name four axioms, others - three axioms. Here we highlight the following axioms.

1. Axiom of complete (perfect) ordering of consumer preferences. A consumer making a purchase can always either name which of the two sets of goods is better than the other, or recognize them as equivalent. So, for sets A and B, or A\u003e - B, or B\u003e - A, or A ~ B, where the sign "\u003e -" expresses the attitude of preference, and the sign "~" - the relation of equivalence or indifference.

2. The axiom of transitivity of consumer preferences means that in order to make a certain decision and implement it, the consumer must consistently transfer preferences from some goods and their sets to others. So, if A\u003e - B, and B\u003e - C, then always A\u003e - C, and if A ~ B and B ~ C, then always A ~ C. From the presented ranking it follows that A gives more satisfaction than B , and B - more than C. Therefore, A gives more satisfaction than C. Transitivity also implies that if the consumer does not distinguish between alternatives A and B and between B and C, then he should not always distinguish between A and IN.

3. The axiom of unsaturation of needs says that consumers always prefer more of any good to less. This axiom does not fit anti-benefits that have negative utility, since they lower the level of well-being of a given consumer. Thus, air pollution and noise reduce the level of consumer utility.

36 ticket The indifference curve depicts alternative sets of goods that deliver the same level of utility (Figure 8.1)

Indifference curves have the following properties: 1. The indifference curve located to the right and above the other curve is preferred by the consumer. 2. Indifference curves always have a negative slope, because rational consumers will prefer more of any set to less. Indifference curves have a concave shape due to decreasing marginal rates of substitution. 4. Indifference curves never intersect and usually show decreasing marginal rates of substitution of one good for another. 5. Sets of goods on curves farther from the origin are preferable to sets of goods located on curves less distant from the coordinates. To describe a person's preferences for all sets of food and clothing, a family of indifference curves can be drawn, which is called an indifference curve map. An indifference curve map is a way to graphically represent a utility function for a particular consumer (Figure 8.2). In fig. 8.2 shows four indifference curves, forming a family - a map of indifference curves. Sets on indifference curves farther from the origin are more useful to the consumer and therefore preferable to sets on less distant curves. In fig. 8.2 U4\u003e U3\u003e U2\u003e U1.

Fig. 8.2. Indifference Curve Map

The indifference curve map gives an idea of \u200b\u200bthe tastes of a particular consumer, since it illustrates the rate of substitution of two goods for any level of consumption of these goods. When we talk about knowing the tastes of consumers, we mean the whole map of indifference curves, and not the current ratio of units of two goods. In the indifference curve map, each curve combines points with the same utility.

The basic working concept of ordinal (ordinal) utility theory is the marginal rate of substitution MRS.

The marginal rate of substitution (MRS) shows how many units of one good the consumer must give up in order to acquire an additional unit of another good. In other words, it is the ratio of the marginal utility of two goods.


Read the text and complete assignments 21-24.

The needs of society, of its different strata, of each individual are so diverse that no state body can take them into account in full and in the appropriate quality. Every item that a person buys for personal use contains a combination of elements that make up the final increment of his consumer wealth. As a person's means increase, he, first of all, requires new qualities in the objects he uses. And only with the help of the market is flexible and effective control over the correspondence of demand to the aggregate individual needs formed by human capital possible. The needs are related to the economic foundations of human capital, the nature of distribution, the balance of supply and demand, and other problems.

The market reveals real needs, and consumption depends on its development. In other words, the market is the accumulator of wealth, the main social institution, the indisputable truth for the growth of consumption. As the ultimate goal, consumption has an active impact on production, because the consumer ... buying the offered product of labor or refusing it, encourages economically correct and punishes erroneous behavior of producers. As a result, those are forced to compete for the consumer, who decides in the market conditions independently what, when and how much to buy.

Obviously, the main limitation for any consumer is the size of his income, and for the production process - his capabilities. Since the needs are diverse and limitless, and the income is limited, the individual is forced to constantly make a choice from the huge number of goods offered on the market. Naturally, making this choice, he seeks to acquire the best set of goods available to him, i.e. seeks to achieve the greatest possible degree of satisfaction, in other words, to maximize utility with a limited income.

(G.S. Khafizova)

Explanation.

The correct answer should contain the following elements:

1) the answer to the first question:

The main limitation for any consumer is his income;

2) the answer to the second question:

As a person's means increase, he, first of all, requires new qualities in the objects he uses;

3) the answer to the third question:

By buying or rejecting the offered product of labor, the consumer encourages the economically correct and punishes the erroneous behavior of the producers.

Response elements can be presented both in the form of quotations and in the form of a concise reproduction of the main ideas of the corresponding text fragments.

Source: USE 2016 in social studies. (part C, option 513)

ALL ECONOMY LESSONS
Grade 10

LESSON № 12. SIGNS OF A RATIONAL CONSUMER

The purpose of the lesson: to consider the signs of rational and irrational consumer behavior; continue to develop the ability to calculate total and marginal utility; develop curiosity and independence; cultivate frugality.

Basic concepts: rational consumer behavior.

Lesson type: lesson in learning new material.

II. Updating the basic knowledge and skills of students

1. Give examples when the same product in different situations may be of great utility and may not be needed at all? (Medicines)

2. If one family drinks tea in the morning, and the other prefers juices, who does it more rationally? (Both families act rationally, because rationality involves choosing what brings personal benefit to each. Each family, probably based on their tastes and limited income, made a rational choice in which their benefits outweigh the costs.)

III. Learning new material

In our lesson we will talk about rational consumer behavior.

The first principle. People choose. Choice is always costly. This means that each person, making a choice, always gives in to something. The choice actually involves two steps. When more than one alternative is available, choose one and the same time discard the other. The old saying “I have no choice” simply does not apply to economic analysis: there are always alternatives, since there are no irreplaceable things! However, sometimes the costs associated with abandoning one of the alternatives are so large or so insignificant that it seems to us that there is only one alternative. An example is choosing something for dessert when there are only two alternatives: wormy apples and chocolate cake. The costs of ditching wormy apples are so low that it seems like there is only one alternative: chocolate cake.

In a market economy, choice plays a very important role. Consumers need to choose which goods and services to buy, bearing in mind that after making a decision, they will have to give up other goods. The manufacturer must determine what goods to produce and to produce efficiently. If a manufacturer makes the wrong decisions, he can't stay in business.

Remember that resource use is a waste. Using resources for one purpose, we lose the opportunity to use them for other purposes. Thus, in economics, it is always necessary to analyze the opportunity costs - the cost of producing a product, estimated from the point of view of the lost opportunity to use the same resources for other purposes. Opportunity cost in monetary terms is the sum of alternative cash costs and unearned cash income.

Opportunity costs can act as the difference between the income that could be obtained with the most profitable of all alternative ways of using resources, and the profit actually received.

The concept of what has become one of the main in the economy (opportunity cost) was introduced by Friedrich von Wieser (1851-1926). In translation, the literature contains the following options: costs of alternative opportunities, costs of missed opportunities, opportunity cost, opportunity costs. The choice is based on Vizer's law: the real value of any thing is the lost utility of other things that could be produced (acquired) with the help of resources spent on the production (acquisition) of a certain thing.

The second principle. People behave rationally. At any hour of the day, people have to choose. What to wear? Study or go for a walk? Find a job or keep studying? Regardless of age, wealth and place of residence, all people must make a choice, and their own life and the lives of people associated with them depend on the choice. Economists believe that all economic activities of the population, private companies and the state are based on the private decisions of individuals. When we understand how and why a choice occurs, then we are close to understanding and predicting economic phenomena.

Of course, not everyone will make the same choice as another, because people have different values. In other words, everyone has their own choice, but everyone has to choose. Rational behavior related to the choice of alternatives unites all people. This behavior is called economic: people choose the option that they think is the best, because it carries the lowest costs and the greatest benefits compared to other options.

Thus, rational behavior is manifested in the fact that people make decisions in order to get the most pleasure or most fully achieve their own goals. Consequently, consumers try to spend their income rationally in order to get the greatest benefit or pleasure from goods and services within their income.

Rational behavior means that people will make different choices because their conditions (constraints) and the information available are different. You may have decided you were going to graduate before looking for a job, and another graduate decided to go to work right after graduating from high school. Why such a different choice? Your abilities are obviously better, and your parents' income is greater than that of your classmate. You may be better informed and more aware that workers with higher specialized education receive significantly higher incomes and their jobs are more stable than workers with general secondary education. So, you choose college, while your classmate with less ability and financial capabilities and less knowledge chooses a job. Both choices are rational, but based on different options and information.

Of course, rational decisions can change if circumstances change. Let's say the government decides that training workers with tertiary education is a national priority. As a result, the state provides more financial support to students. In these new conditions, your classmate may, after graduating from high school, choose not work, but study.

IV. Lesson summary

Students draw conclusions about rational consumer behavior.

Rational behavior means that people will make different choices because their capabilities (limitations) and available information are different.

Rational behavior is manifested in the fact that people make decisions in order to get the most pleasure or achieve their own goals as fully as possible.

The real value of a thing is the lost utility of other things that could be produced (acquired) with the help of resources spent on the production (acquisition) of a certain thing.

V. Homework

Consider Adam Smith's paradox: "Why is water, which is so necessary that life is impossible without it, has such a low price, while diamonds that are not needed at all have such a high price?"

 

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