'The Theory of Individual Behavior', is devoted to the use of indifference analysis to build a framework for demand theory. Indifference analysis goes to great lengths to explain consumer behavior and how consumers make choices between options available to them. The options they face include budget constraints, different preferences for risk, and a multitude of products and services from which to choose. If one steps back and looks at consumer behavior, it seems to be based upon a premise that is not actually stated in our book. That premise is that consumers behave rationally in their consumption expenditures.
Do you believe consumers do behave rationally? Is so, how do you explain impulse buying, buying as a result of advertising or strong sales pitches, buying for purposes of conspicuous consumption, or buying to simply have something bigger and better than someone else? If consumers do not behave rationally, how can this theory account for the above behavior? Is the theory still valid? If you think consumers do behave rationally, how can rational thinking explain the above behaviors? How do your thoughts impact, if at all, your opinion of the theory?
Consumers do behave rationally in their consumption choices. The Merriam-Webster dictionary defines rationality as the quality of being rational, that is the quality of having a reason or understanding. The question then becomes how do you define reason or understanding.
Impulsive buying, or buying due to the sales pitch, or due to advertising, or due to the urge to get something better or bigger than someone else can all be included in this. When you buy a product due to the sales pitch or due to the advertising that does not mean that you do not get satisfaction from consuming the product. If you buy to show someone inferior that does not mean you do not gain satisfaction from consuming the product.
'The Theory of Individual Behavior' is debated.