Editorial—Are Consumers Rational? Experimental Evidence?

Despite some misconceptions, consumer rationality is a property of the researcher rather than the consumer. Consumers become more rational as we are better able to predict their behavior or other important outcomes influenced by their behavior. Perfect rationality results when we achieve accurate predictions. Consequently, at least for many articles, consumers are becoming more rational as we find better ways to predict. However, some experimental consumer behavior articles find the opposite. The difference between experimental and statistical controls explains the divergence in conclusions. Experimental controls test rationality based on whether previously absent variables exhibit significant explanatory power holding known explanatory variables constant. Statistical controls test rationality based on the incremental explanatory power of previously absent variables after accounting for known explanatory variables. Moreover, experimental tests tend to isolate consumer behavior predictions while statistical tests check for sufficient accuracy to choose among different firm strategies. Both perspectives are correct but ask very different questions.