Consumer Optimization Problem Solving
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A01=Alfred L Norman
Author_Alfred L Norman
Category=KCK
Category=KJMD
Consumer Behaviour
Consumer Optimization
Decision Making
eq_bestseller
eq_business-finance-law
eq_isMigrated=1
eq_isMigrated=2
eq_nobargain
eq_non-fiction
Microeconomics
Product details
- ISBN 9789814635288
- Publication Date: 21 Jan 2015
- Publisher: World Scientific Publishing Co Pte Ltd
- Publication City/Country: SG
- Product Form: Hardback
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What algorithms are tractable depends on the speed of the processor. Given the speed of digital computers, polynomial algorithms are considered tractable. But, a human can take several seconds to make one binary comparison between two pens. Given this slow speed, sublinear algorithms are considered tractable for an unaided human and this defines Simon's concept of bounded rationality.Humans make simplifications to solve the intractable consumer optimization problem. Consumers search for goods and services item-by-item, which greatly reduces the number of alternatives to consider. In addition, consumers have operators that can process a set in a single operation. Also, consumers budget by incremental adjustment.In considering consumer performance the question to ask is how close to optimal is consumer performance and not whether consumers optimize as a yes/no question. Given the ordinal nature of utility theory this creates a basic measurement problem. The book presents a review of the literature on consumer performance.This is an opportune time to study consumer procedures because the Internet provides a media to make substantial improvements in consumer performance. The book includes a case study comparing the performance of a digital camera selection code with the advice of sales people. A field experiment demonstrates that the software code provides better advice.
