Thursday, April 5, 2018

It's Just Breakfast

Theories of rational decision-making often focused on a very narrow and informed decision: an individual must choose between two options and has complete information about both – hence he makes a logical decision based on the likelihood of each option to achieve a desired outcome.

In an actual purchasing situation, the customer has a very complex decision and little information.    In a typical American supermarket, there may be 100 or more different options in the breakfast cereal aisle.   The customer is not an expert in breakfast cereal, and knows only a little bit about some of the options and nothing at all about most of them.   

And while the ostensible problem the product solves is nutrition, there are many other concerns: would a young adult male consume a cereal that is primarily marketed to elderly women?  What would his friends think of him if they saw it in his cupboard?

So in the cereal-buying situation, and virtually every consumer decision, the consumer is not able to act as the perfectly rational and perfectly informed individual that are presumed by the logical decision-making process.   

This is not to say it is not possible: one can study about nutrition, learn about all 100 breakfast cereals on the market, document the decision-making process to carefully exclude any subjective or nonsensical criteria, and so on – but it is not at all reasonable to expect anyone at all to put in that level of effort.   

It’s just breakfast, after all.

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