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consumer behaviour


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The way in which consumers choose how to use their incomes. In economic theory it is usually assumed that every consumer is aware of their wants and how to satisfy them and that consumers attempt to maximize the benefits received from consumption of goods and services. Thus, consumers behave so as to maximize their preferences or utility function. An alternative view is that consumers work partly on a basis of satisficing, that is, repeating satisfactory purchases until something goes wrong, and partly on a basis of trial and error, to explore their own reactions to products they have not previously tried. This position leaves more scope for advertising to influence purchases than the view that consumers maximize a fixed utility function subject to known constraints.

Subjects: Economics.


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