Toward a positive theory of consumer choice

  title={Toward a positive theory of consumer choice},
  author={Richard H. Thaler},
  journal={Journal of Economic Behavior and Organization},
  • 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

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