Misjudging the Judgment of Consumers

Misjudging the Judgment of Consumers
“the idea of man as the ‘rational optimizer'”

Much of modern economic thought is based on the idea of man as the “rational optimizer” who always judges his needs and efficiently uses the means at hand to reach his goal. The market supposedly reflects this idea of man.

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However, recent studies from the more psychologically based school of “behavioral economics” report opposite findings. Examples such as credit card debt and weigh gains show a lack of judgment on the part of many. Cultural scholar Matthew Crawford reports that, “In general we are terrible at estimating probabilities. We are not so much rational optimizers as creatures who rely on biases and crude heuristics for making important decisions.”

(Taken from Matthew B. Crawford, The World Beyond Your Head: On Becoming An Individual in an Age of Distraction, Farrar, Straus and Giroux, New York, 2015, p. 36.)