In discussing rational choice theory (RCT) as an explanation of demand behavior, Becker (1962, Journal of Political Economy, 70, 1–13) proposed a model of random choice in which consumers pick a bundle on their budget line according to a uniform distribution. This model has then been used in...

A decision maker (DM) makes choices from different sets of alternatives. The DM is initially fully ignorant of the payoff associated to each alternative, and learns these payoffs only after a large number of choices have been made. We show that, in the presence of an outside option once payoffs...

The study tries to recognize the behaviour of the consumer with respect to the opportunity cost and marginal benefit associated with the commodity. The research tries to evaluate the factors and identify behavioural traits of consumers if they exist in decision making. The study also tries to...

The study tries to recognize the behavior of the consumer with respect to the opportunity cost and marginal benefit associated with the commodity. The research tries to evaluate the factors and identify behavioral traits of consumers if they exist in decision making. The study also tries to...

Since the end of the eighties the Becker and Murphy model of rational addiction has been the dominant approach to estimate addiction effects. A rational addictive consumer, a smoker for instance, is supposed to maximize over the life cycle a stable utility function and to be fully aware of the...