Experimental economics summary paper - Essay Example

Number and Number Experimental Economics Summary Paper Brief Introduction Inrelation to income and consumption, the article written by Loewenstein and Thaler discussed that consumers have many options that will significantly affect their decision making on how they will spend the wages or income they receive each year. The study result explained that the free will each person have could will make the existing economic assumptions of rational choice inaccurate. Since economists do not pay much attention with the specific choices or preferences of each consumer when deciding on how to spend their wages, the authors revealed that psychology behind consumers’ decision making can either be constructive or destructive.

Main Research Findings Within the microeconomic level, each individual make important decision on what to purchase with their savings, whether or not they need to borrow money from lending institutions, and how they will invest their excess money in order to earn interests. Even though a company decided to offer huge discount rate to its target consumers, the fact that more people would purchase the product would mean that the company could receive more financial gain than losses.Description of a Specific Study Result The main foundation in the study of economics is the law of supply and demand.

In relation to this particular economic theory, I am interested in learning more about how companies that offers discounted prices to its target consumers could earn more profit than losses in the long run. Discussion Question In order to gain profit, how much should each company sell their product after discounting? *** End ***ReferencesLoewenstein, G. and R.H. Thaler. "Anomalies: Intertemporal Choice." Journal of Economic Perspectives (1989): Vol. 3, No. 4, pp. 181-193.