Rationality and Framing effectWatch
I need a little help with a micro essay. Its based on the idea of rationality and framing effect.
A firm that produces insulation systems has increased the price of its product and is considering the launch of two alternative advertising campaigns. Campaign A: “If you insulate, you will save £200 per year”. Campaign B: “If you do not insulate, you will lose £200 per year”.
Analyse the consequences for the consumer choice between insulation and heating using classical consumer theory and then using the concept of “framing” from behavioural economics. Discuss pros and cons of the rational consumer hypothesis and its possible deviations.
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There PLENTY of material out there. All you need to do is break down the essay into three parts and examine each part separately and then try and tie them all together at the end in your conclusion.