Question

In neo-classical economics, rational choice is backed by a set of rational preferences. Explain the meaning of this statement. Invoking insights from behavioral economics or other fields and using your own examples, explain in detail, why individual preferences may not be rational all the time.

Answer 1

Hindi new classical economics rational choice is backed by a set of rational preferences this statement means that every choice have some alternatives and there are some assumptions the assumptions are based on the experiences and their experiments the choices be made as per the requirement that we created and this is the only reason we prefer that any choice will become practically acceptable and adoptable only when there is a backing of a set of rational preferences means some references are always there to make some choices for example if you are looking for a mobile phone then you have some preferences like it may be a touch phone or it is ready for the up gradation and various other application you wish to who gave as a preference and when these preferences fulfil then you can only go to make your purchase finalize and make your final choice.
In the second concept there is invoking inside from the behaviour it means that the study of one's behaviour it includes the consumer's behaviour and the supplies behaviour the consumer's behaviour depends on the certain choices that are made by the consumers in certain situations but the supplies behaviour totally depends on the market research and market condition whatever the consumer is going to give some preferences it is all adopted by the supplier and this is the most important thing for the establishment of the product in the market and to capture the market share.
Individual preferences may not be ration all the time it is just because that there is a diversity in the choices and the preferences made by the consumers the causes of consumers are totally different and that's the only reason it depends on the consumer to the consumer but there is no approach is dependent on the Quantitative approach which measures a large number of persons and consumers the principles on the back by the various assumptions and this is the only reason the consumer choices depend on individual customisation and the implementation of the behavioural choices that is important for the normal point of you to reach the things as for the future requirements and it is an instruction to the seller to adapt according to the consumer choices and this is the only reason individual preferences may not be rational at all the time.