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Rational Choice Theory 

ARC: Research: Theories: Homo Economicus

Overview

Consider a consumer with income I facing a vector of goods, x' = [x1 x2 ··· xn] available with prices c' = [c1 c2 ··· cn] and utility u(x). The consumer picks the optimal bundle of goods that maximizes u(x) such that x'c < I.  Marketing theorists have largely ignored this theory in favor of Prospect Theory and other theories that take choice context into account.

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Key Citations

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Application Areas

cb, methods

Other Literature

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