Proceedings of the 52nd Annual Meeting of the ISSS - 2008, Madison, Wisconsin, Proceedings of the 52nd Annual Meeting of the ISSS

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Anthony Gabriele


Adam Smith’s assumption that consumers are rational and knowledgeable in their buying decisions is examined in this paper, along with the views of other prominent economists. It is concluded that this assumption is incorrect, though consumers are clearly somewhat rational and knowledgeable. The detrimental effects of the lack of consumer product knowledge are thus recognized in a few scenarios as examples.
Although, this would be a very valid conclusion for this paper, the paper follows this topic of Smith’s faulty assumption for the purpose of making improvements of our economic system. The conclusion that organizing to enlighten consumers can correct for Smith’s faulty assumption is proposed as a solution to many of the inequalities of our present free market system. Some details on the effective way to organize for consumers are mentioned.

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