To what extent do you believe human beings are rational decision makers

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safahJ
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Most economic principles are laid out with the assumption that human beings are rational decision makers. But to be fair, humans are driven by emotion when it comes to purchases, and welfare is often determined by satisfaction that comes from consumption. You could talk about studies that show how people are more likely to impulse purchase using credit cards as compared to cash - even though the former could have more of a financial repercussion.

Similarly, people don't always opt for the cheapest good in the market, even if the law of demand states that it's high when prices reduce, abnormal often indicate otherwise. Also focus on how consumption has strongly linked to social status, and that welfare is usually higher when people consume goods of higher price and quality (for example, Veblen goods provide high consumer welfare simply due to the feeling of accomplishment or satisfaction one derives from being able to purchase such a good).

Try and analyze how marketing strategies also often try to distract people from rationality, and how they try to make people purchase their good regardless of price changes. Human irrationality combined with advertising strategy is probably why people purchase iPhones despite their high prices - though this can be looked at in combination with brand loyalty and Apple's market dominance.
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Thanks so much this has really helped👍
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If you were writing a conclusion giving your overall opinion what would you say
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(Original post by safahJ)
If you were writing a conclusion giving your overall opinion what would you say
I'd definitely say that human beings are not rational decision makers in any way. However, all human beings try to be rational with purchasing habits, which is why economic laws are formed on the assumption of rational decision making.
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