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Advertising, the Rationality Assumption and Willy Wonka

by AdrianFohr

The value that the consumers assign to the tickets is highly subjective, it is mostly a matter of opinion; however, a cursory calculation of probability and expense will show that the ticket-hunters are almost certainly behaving irrationally.  The costs of ticket searching (which includes buying candy bars and in one example employing candy bar openers) weighed against the probability of finding a ticket (five out of a very large number) would predict that it isn't worth it to bother trying to find a candy bar.

On of the ways that people behave irrationally is that by misjudging probabilities.  Economists know that people typically understand probabilities poorly.

Did Willy Wonka shift the Supply Curve, the Demand Curve, both or neither?  If there was a shift, was it permanent?

 

Advertising and the Rationality Assumption

Classical economics assumes that people are perfectly rational. As we see in this clip, the assumption is not correct.

from Willy Wonka and the Chocolate Factory (1971)
Creator: Mel Stuart
Distributor: Paramount Pictures
Posted by AdrianFohr
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