IDEAS home Printed from https://ideas.repec.org/a/igg/jabe00/v11y2022i1p1-8.html
   My bibliography  Save this article

A Model of Consumer Choice With Bounded Rationality and Reference Quantity

Author

Listed:
  • Gian Italo Bischi

    (DESP, University of Urbino, Italy)

  • Fabio Tramontana

    (University of Urbino, Italy)

Abstract

The authors consider the economic problem of consumers' demand under the assumption of bounded rationality. They move from the hypothesis that the consumer does not know the amount of the good maximizing the utility but he/she is able to understand, at each time period, if the current consumption is above or below than the optimal choice and decide consequently for the next period. Moreover, they also take into consideration the role of a reference amount of consumption that can influence the consumption choice of the consumer. They show that this assumption led to a failure in the convergence process towards the rational choice because the equilibrium of the model, even when locally stable, is located on an intermediate value between the rational choice and the reference quantity.

Suggested Citation

  • Gian Italo Bischi & Fabio Tramontana, 2022. "A Model of Consumer Choice With Bounded Rationality and Reference Quantity," International Journal of Applied Behavioral Economics (IJABE), IGI Global, vol. 11(1), pages 1-8, January.
    • Handle: RePEc:igg:jabe00:v:11:y:2022:i:1:p:1-8
    as

    Download full text from publisher

    File URL: http://services.igi-global.com/resolvedoi/resolve.aspx?doi=10.4018/IJABE.312248
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Grohmann, Antonia & Sakha, Sahra, 2019. "The effect of peer observation on consumption choices: evidence from a lab-in-field experiment," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 51(55), pages 5937-5951.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thrane, Christer & Haugom, Erik, 2020. "Peer effects on restaurant tipping in Norway: An experimental approach," Journal of Economic Behavior & Organization, Elsevier, vol. 176(C), pages 244-252.
    2. Tomáš Želinský, 2021. "Intertemporal Choices of Children and Adults from Poor Roma Communities: A Case Study from Slovakia," Eastern European Economics, Taylor & Francis Journals, vol. 59(4), pages 378-405, July.
    3. Antonia Grohmann & Melanie Koch, 2022. "The Effect of Social Comparison on Debt Taking: Experimental Evidence," Discussion Papers of DIW Berlin 1996, DIW Berlin, German Institute for Economic Research.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:igg:jabe00:v:11:y:2022:i:1:p:1-8. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journal Editor (email available below). General contact details of provider: https://www.igi-global.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.