Question

Can you please read what is in the photo and answer the question:
1) Do you think consumers are acting rationally during this crisis in your view?

I need at least 175 words please. Thank you so much for your help.

Think too of the impact of Covid 19 on the consumer behavior. Işee behavior that makes no sense! Why, for example were we panicking over toilet paper? Class, consider how consumer behavior drives other consumers. In these rare occurrences like the current experience, we tend to follow other consumers who ordinarily wouldn't be considered to be a reference group. Think too, how the travel ban and the tariffs and import restrictions will impact consumers over the next several months or even years. Are consumers acting rationally during this crisis in your view?

Answer 1

The tendency of consumers or any person in general during emergencies is to secure himself and his family first. This is a natural human reaction on part on part of consumers. When a person buys more products than is necessarly needed, he feels much more secure than when he buys the normal quantity.Therefore, this sense of security in consumers drive their behaviour and makes them buy products in excess quantity than what is needed. Since most of the consumers feel this security is necessary, it generates into herd behaviour where everyone is jostling for the access to resources. So when a person who buys normal quantity will be left out due to stock outs and this will reinforce others view of stocking during crisis. People dont like to feel leftout during such crisis and it will look bad on their part.Therefore, everyone will start buying things which is herd behaviour. Travel bans and restrictions will reduce the trade and business among the people and will result in further job loss which will reduce earning power and reduce the demand further. Consumers will start saving rather than spending money. People act emotionally rather than rationally. In their view, it is rational to stock up during an emergency event.