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My view applies a behavioral economics perspective to explain consumer behavior by integrating psychological factors with traditional economic theories. My work emphasizes that consumer decisions are not solely rational but are significantly influenced by cognitive biases, emotions, and environmental contexts.. My view contrasts this with traditional economic theory, which primarily focuses on general economic environment changes and supply/demand dynamics without deeply considering consumer psychology .
Core Tenets of my Behavioral Economy View on Consumer Behavior
My approach to understanding consumer behavior can be broken down into several key areas:
1. Integration of Psychology and Economics
My central argument is that a comprehensive understanding of consumer behavior requires bridging the gap between theoretical economics and practical applications influenced by human behavior . My view posits that traditional economic models often fall short because they overlook the complex psychological underpinnings of decision-making. By incorporating insights from psychology, Lok aims to provide a more accurate and nuanced prediction of consumer actions .
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John Lok
I had graduated business Administration Science Degree in Common Wealth Open University. Then, I concentrate on researching whether how economic changing environment can influence our behaviors.
My opinion argues that applying behavioral economic theory leads to more accurate predictions of consumer behavior compared to traditional economic theory . This is because behavioral economics considers consumer psychology and the economic environment, whereas traditional theory often focuses solely on general economic environment changes in terms of demand and supply .
Examples of Application
My book, "Behavioral Economy Explains Consumer Behavior," provides various cases to illustrate these principles. For instance, my view might explain:
Medicine Product Pricing: Why an increase in the price of certain medicine products might paradoxically lead to an increase in demand. This could be due to perceived quality, urgency, or a lack of viable alternatives, all influenced by psychological factors rather than pure price elasticity .
New Invention Excitement: How the novelty and perceived benefits of new inventions can excite consumer purchase desire, often overriding purely rational cost-benefit analyses .
Past Purchase Habits: The significant role of consumer past purchase habits in influencing future demand, highlighting the power of routine and cognitive inertia .
By exploring these complex interactions, my behavioral economy view provides a robust framework for understanding and predicting the multifaceted nature of consumer behavior.
