IMPERFECT INFORMATION, CONSUMER THEORY, AND ALLOCATIVE ERROR IN CONSUMPTION

Traditional economic theory of the consumer assumes the existence of perfect information. However, in reality this assumption is rarely fulfilled. In this paper a model is presented which relaxes this assumption and explicitly introduces the possibility of imperfect information into the theory of consumer behavior. Specifically, the focus is on consumer decision making when the utility realized form a bundle of goods and services can be different from the utility anticipated during the budget allocation process.


Issue Date:
1980
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/13742
Total Pages:
19
Series Statement:
Staff Paper P80-8




 Record created 2017-04-01, last modified 2017-08-23

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