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Product specifications and consumer stupidity

Posted by Graeme in Market failure at 7:28 am on Friday, 14 November 2008

New research provides more evidence that people simply are not rational in choosing what they buy, a fundamental assumption of economics. I have previously discussed problems including consumers inability to understand many products.

The finding is that product specifications influence people in the regardless of the real evidence. This applies when the product with the worse specifications is observably better, or even when the specifications are acknowledged as being uninformative.

So much for the rationality of homo economicus.

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