RESEARCH: Consumer behaviour boils down to two theories

AN INTERESTING DECEMBER 2012 paper from the Australian Government's Department of Finance and Deregulation, Offices of Best Practices Regulation entitled "Influencing Consumer Behaviour: Improving Regulatory Design" is an instructive piece of research when viewed through the lens of our own TV business.The paper explores two broad frameworks that influence consumer behaviour - Rational Choice theory and Behavioural Economics. Rational Choice theory holds that consumers maximize utility subject to their budgetary limitations. Behavioural Economics assumes choice is affected by social, economic, emotional and other factors. Examples from the health, finance and other sectors are used to illustrate how government or businesses...