Consumer Behavior Theory

 
 
 
 
Consumer behavior theory, together with models derived from such theory, is intended to (a) identify consumer variables, (b) explain relationships between the variables, (c) develop operational definitions for the variables, and (d) specify cause-and-effect outcomes from variable interactions. Neoclassical economic theory applied to consumer behavior tends to assume that benefit (utility) maximization describes consumer behavior over a life time (Kivetz & Simonson, 2002).

In economic theory, consumer behavior is addressed within the concepts of consumer preference and consumer surplus. Consumers' surplus is the excess amount a consumer is willing to pay for a good, as opposed to doing without it, over the amount actually paid for the good. A consumers' surplus can exist only within the context of the concept of diminishing marginal utility. This concept holds that, at some point, consumption of additional incremental quantities of a good will yield successively smaller increases in utility. Thus, it is assumed that an individual will be willing to pay more for the first unit of consumption than for a unit consumed at some point further along. If the actual price paid for a good is assumed to be its marginal price, then the sum of the differences between that price and the prices than one would be willing to pay for earlier units in the consumption chain (assuming a limitation on supply which would cause prices for earlier consumption to be

     
 
 
 
    

 

Related Essays

Hierarchy of Needs & Consumer Behavior .... The intention of consumer behavior theory, together with any models derived from such theory, is to (a) identify consumer variables, (b) explain relationships .... (2179 9 )

Maslow's Model of Human Behavior & Motivation .... The intention of consumer behavior theory, together with any models derived from such theory, is to (a) identify consumer variables, (b) explain relationships .... (2058 8 )

Applying Games Theory to Airfare Competition .... holiday periods. Prices also function in a free market economy with respect to the theory of demand and consumer behavior . In this .... (3612 14 )

Behavior of Japanese & American Consumers .... consumer behavior, even though--or especially because--of the unitary character of its modern and historical culture and tradition. In theory, consumer .... (2544 10 )

Conflicting Values of Marketing to Children .... Consumer behavior theory, together with any models derived from such theory, is intended to (1) identify consumer variables, (2) explain relationships between .... (2760 11 )


Category: Business - C
 
 
 
Common Topics
 
 
 
 
 
 
 
Click Here to Get Instant Access to over 32,000 Professionally Written Papers!!!
 
 
 
Join Now  
 
 
 
 
 
Saved Papers  
 
 
Save your essays here so you can locate them quickly!
 
 
 
Testimonials  
 
"Thank you for making such a high quality site! Your papers are the best I have seen around"
Debbie B.
 
"Your site was very helpful and gave me the details I needed in order to complete my essay!!!"
Mike F.
 
"This site is an excellent vehicle for quick referrences. Thanks a bunch!"
Carla T.
 
"Great site, I got a lot of new ideas I would have never thought of before."
Nate A.
 
"I love this site!!!"
Marie H.
 
 
 
 
Copyright © 2007 - 2014 Lots of Essays. All Rights Reserved. DMCA