Economics-sizzling

In economics we assume that everyone makes a rational decision to reach an optimal state provided that we have all the resources such as information, time, money etc. to make such a decision. Rational decision looks good in books but can’t be seen in real life. Factors influencing one's decision (Source-KNOWeScape) No one has all the above stated resources to make a decision, they are bound by one thing or another. Thus, leading us to make decisions within the limited resources we have- wherein bounded rationality comes into play. Bounded rationality is an idea where we make satisfactory decisions within the limits of information, resources available and mental capabilities. Being a satisficer Instead of reaching the bliss optimal state we reach a satisfactory state when we talk about bounded rationality. People who take such decisions are called satisficers who do not put too much effort in making a flawless decision but choose something that will just be enough to satisfy their n...

We all share one thing in common, we are all consumers. Whether you are rich or poor, healthy or not, smart or not- it doesn't matter we all consume something or the other. In our daily life we make so many decisions - what to wear, where to eat, what to buy with various choices  accompanied with these decisions and end up preferring a choice over another with the sole aim of that being the best and optimal for us. All of us in this world are not the same. We make different choices, one would prefer to stay in a mansion in Bandra while another one wants to stay in Lutyens Delhi  and these preferences depend on multiple factors.  So what is consumer preference? Consumer preference is defined as a set of assumptions that focus on consumer choices that result in different alternatives such as happiness, satisfaction, or utility.  A consumer is able to assess the utility received from a bundle of commodities or is able to rank his preferences, thus enabling him to make a...