Rationality and Optimizing Behaviour of Technology-aided Consumers: A Critique on Perspectives of Behavioural Economists

Abstract

Behavioural economics grew to prominence by challenging the foundational assumptions of standard economic theory, raising questions about the future trajectory of economic thought. This study presents arguments to reinstate trust in the assumptions of consumers’ rationality and their optimizing behaviour. The study brings out how this criticism is inappropriate. Perspectives of leading behavioural economist such as Dan Ariely, Richard Thaler, Daniel Kahneman and Amos Tversky are critically synthesized and startling gaps are spotted. The study motivates researchers to evaluate the impact of technology on rationality of consumers. On one hand, technology has enhanced access to information and processing capability, but on the other hand, it has brought data deluge and confusion. Contemporary innovations such as GenAI-enabled smartphones, e-commerce platforms, chatbots and robots tend to increase consumers’ access to information and processing ability. Thus, aiding humans in achieving full rationality against popular belief of humans having ‘bounded rationality’ which implied inability of humans to possess optimising behaviour. The aid received from technological prowess has been named ‘Aided Rationality’. The study argues for resurgence of faith in standard economic theory and prompts the researchers to study the interaction of ‘Aided rationality’ with ‘data deluge’ and concludes by identifying compelling questions for future research.