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I don't assume that consumers are rational actors, at least not in the aggregate or binary sense that the term is usually used. Theories involving rational acto
by dsacco 10y ago
I don't assume that consumers are rational actors, at least not in the aggregate or binary sense that the term is usually used. Theories involving rational actors usually use the terminology in groups, whereas I'm talking about an individual customer and using rationality as more of a sliding scale with percentiles. In this case, it seemed incredible to me that someone would be so irrational on that scale.
However, you did clarify your example, which makes it easier to accept. Phrased this way, it seems as though a potential upside of $5,000 wasn't worth it for someone who is skeptical of your product and has free alternatives. Stated this way, I can understand how VCs cause market incentives that make your job more difficult.