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Behavioural Economics

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-fully referenced!
Also Diagrams may be included if appropriate – however fully referenced.
Title: To what extent can anchoring be used to enhance the standard Marshallian concept of demand?
1. Laying out the standard model that I seek to criticise
-the concept of demand and supply – Alfred Marshall
-Marshall’s idea explained – reference to Principles of Economics
2. Introducing the notion of how behavioural economics may give evidence to disprove the model – Reference to Dan Ariely’s ‘Predictibly Irrational’ -Chapter 2
a. The notion of fairness and how this exploitation can affect economic decision making, and affect demand – reference to Daniel Kahneman’s – Thiking Fast and Slow
3. Introducing the notion of ‘anchoring’ and how this departs from the above model.
– the way in which supply and demand can be manipulated by external forces such as an anchor
– anchoring and what it is
The above is not my full essay. However this is the first half to my essay which after this part will be followed by an experiment and conclusion that I will write myself.
Below is not relevant for the first part of the essay that I would like written, but might interest you:
After this will come an experiment which I did on goods in a sweet shop, but adding anchors to the price labels. The experiment showed that the anchor had an effect and manipulated demand. The anchor happened to exploit the humans notion of fairness, thus making it effective.
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