Neoclassic vs. Behavioral Economics debate - Assignment Example

Neo ic vs. Behavioral Economics debate The behaviors and decision made by consumers are motivated by varying rationalities. The behavioral theory is one that analyses the behavior behind choice made by consumers that are resultant from beliefs and attitudes of consumers (McFadden 1). On the other hand, the classical theory is one that brings out the consumer as a maximizer, and who settles for nothing, but the best (McFadden 1). From McFadden work, the behavioral theory is one that sheds light on the preferences and choices made by the consumers as a result of their perception towards a product, as well as their attitudes (2-3).

The classical theory, on the other hand relies on the values and experiences that consumers have towards a particular product; thus, select a product, not from their feelings, but from value expected (McFadden 19). Lastly, can experience influence behavior despite the attitude towards a product is positive? Are beliefs consistent among all consumers?Work citedMcFadden, Daniel. Rationality for economists? Berkeley: Department of Economics. University of California. 1996. Print.