Toward a positive theory of consumer choice

@article{Thaler1980TowardAP,
  title={Toward a positive theory of consumer choice},
  author={Richard H. Thaler},
  journal={Journal of Economic Behavior and Organization},
  year={1980},
  volume={1},
  pages={39-60}
}
  • R. Thaler
  • Published 1 March 1980
  • Economics
  • Journal of Economic Behavior and Organization
The economic theory of the consumer is a combination of positive and normative theories. Since it is based on a rational maximizing model it describes how consumers should choose, but it is alleged to also describe how they do choose. This paper argues that in certain well-defined situations many consumers act in a manner that is inconsistent with economic theory. In these situations economic theory will make systematic errors in predicting behavior. Kanneman and Tversey's prospect theory is… Expand

Figures and Tables from this paper

Normative Rational Choice Theory: Past, Present, and Future
The paper shows that the theory of rational choice should be better understood as a?normative, prescriptive, and not as a?descriptive theory of human behavior. Such an interpretation amounts toExpand
Four essays in consumer decision-making
A theory of preferences was recently proposed on how consumers’ choices depend on both stable “inherent” likings and sensitivity to framing, task, and context effects (Simonson, 2008). Managers canExpand
Rational Choice: The Contrast between Economics and Psychology
  • V. Smith
  • Economics
  • Journal of Political Economy
  • 1991
Rational Choice--the published record of a conference on economics and psychology--frames the issues as a contest between economic theory and the falsifying evidence from psychology. According to aExpand
Time-inconsistent Preferences and Consumer Self-Control
Why do consumers sometimes act against their own better judgment, engaging in behavior that is often regretted after the fact and that would have been rejected with adequate forethought? MoreExpand
Back to the Ordinal Revolution: Behavioral Economic Concerns in Early Modern Consumer Choice Theory
The paper argues that much of the theoretical work on consumer choice theory during the first third of the twentieth century actually addressed some of the same issues discussed in contemporaryExpand
Motivated Preferences
The paper develops a model of individual decision-making in which discretionary cognitive adjustment creates a durable stock that complements choice of action. The key innovation of the theory is toExpand
Values in Consumer Choice: Do They Matter?
Mathematical tractability has restricted economic analysis of consumer behaviour within a confined boundary of certain axioms. Often, these axioms are found to be empirically false; even moreExpand
An Experiment on the Pure Theory of Consumer'S Behaviour
By checking whether consumer demand satisfies the axioms of revealed preference, one can test the empirical validity of the neoclassical theory of consumer behaviour. However, applying the axioms toExpand
Applications of Prospect Theory to Political Science
  • J. Levy
  • Computer Science
  • Synthese
  • 2004
TLDR
This article begins with an overview of prospect theory and some of the evidence upon which it is based, and then considers some the implications of the theory for American politics, international relations, and the law. Expand
Modeling the Psychology of Consumer and Firm Behavior with Behavioral Economics
Marketing is an applied science that tries to explain and influence how firms and consumers behave in markets. Marketing models are usually applications of standard economic theories, which rely onExpand
...
1
2
3
4
5
...

References

SHOWING 1-10 OF 32 REFERENCES
Economic Theory of Choice and the Preference Reversal Phenomenon
A body of data and theory has been developing within psychology which should be of interest to economists. Taken at face value the data are simply inconsistent with preference theory and haveExpand
An Economic Theory of Self-Control
The concept of self-control is incorporated in a theory of individual intertemporal choice by modeling the individual as an organization. The individual at a point in time is assumed to be both aExpand
Irrational Behavior and Economic Theory
  • G. Becker
  • Economics
  • Journal of Political Economy
  • 1962
ALTHOUGH it has long been agreed that traditional economic theory "assumes" rational behavior, at one time there was considerable disagreement over the meaning of the word "rational." To many, theExpand
An Economic Theory of Self-Control
Although many economists, most notably Strotz, have discussed dynamic inconsistency and precommitment, none have dealt directly with the essence of the problem: self-control. This paper attempts toExpand
Prospect theory: analysis of decision under risk
Analysis of decision making under risk has been dominated by expected utility theory, which generally accounts for people's actions. Presents a critique of expected utility theory as a descriptiveExpand
Theory of Games and Economic Behavior.
This is the classic work upon which modern-day game theory is based. What began more than sixty years ago as a modest proposal that a mathematician and an economist write a short paper togetherExpand
Bayes Rule as a Descriptive Model: The Representativeness Heuristic
Results of experiments designed to test the claim of psychologists that expected utility theory does not provide a good descriptive model are reported. The deviation from tested theory is that, inExpand
Behavioral Decision Theory
Abstract : This report provides a critical overview to work, its applicability and directions for further research. As might be expected with a burgeoning, multi-disciplinary field, it is difficultExpand
Specious reward: a behavioral theory of impulsiveness and impulse control.
  • G. Ainslie
  • Psychology, Medicine
  • Psychological bulletin
  • 1975
TLDR
This work has shown that impulsiveness seems to be best accounted for by the hyberbolic curves that have been found to describe the decline in effectiveness of rewards as the rewards are delayed from the time of choice. Expand
The effects of severity of initiation on liking for a group: A replication
Abstract This epperiment represents an attempt to rule out a number of alternative explanations of an effect found in a previous experiment by Aronson and Mills. This effect, that the more a personExpand
...
1
2
3
4
...