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Social norms and equality of opportunity in conspicuous consumption: on the diffusion of consumer good innovation

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  • Reinstaller,Andreas
  • Sanditov,Bulat

    (MERIT)

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    Abstract

    This paper presents a simple evolutionary model to study the diffusion patterns of product innovations for consumer goods. Following a Veblenian theme, we interpretconsumption as a social activity constrained by social norms and equality of opportunity. Societies that allow for more behavioral variety will experience faster adoption of new consumer goods. We also find that the speed of diffusion as well as the saturation levels reached highly depend on the equality of opportunity. Combining these two effects, we conclude that a social structure displaying behavioral variety and equal opportunities dominates any other social set-up in terms of the speed of adoption of product innovations.

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    Bibliographic Info

    Paper provided by Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT) in its series Research Memorandum with number 017.

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    Date of creation: 2003
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    Handle: RePEc:unm:umamer:2003017

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    Keywords: economics of technology ;

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    1. Rauscher, Michael, 1993. "Demand for social status and the dynamics of consumer behavior," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 22(2), pages 105-113.
    2. Sen, A., 1996. "Maximisation and the Act of Choice," Papers 270, Banca Italia - Servizio di Studi.
    3. Bruno S. Frey & Alois Stutzer, . "What can Economists Learn from Happiness Research?," IEW - Working Papers 080, Institute for Empirical Research in Economics - University of Zurich.
    4. Congleton, Roger D., 1989. "Efficient status seeking: Externalities, and the evolution of status games," Journal of Economic Behavior & Organization, Elsevier, vol. 11(2), pages 175-190, March.
    5. Wolfgang Pesendorfer, 1993. "Design Innovation and Fashion Cycles," Discussion Papers 1049, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    6. Geroski, Paul A, 1999. "Models of Technology Diffusion," CEPR Discussion Papers 2146, C.E.P.R. Discussion Papers.
    7. Easterlin, Richard A., 1995. "Will raising the incomes of all increase the happiness of all?," Journal of Economic Behavior & Organization, Elsevier, vol. 27(1), pages 35-47, June.
    8. George A. Akerlof, 1997. "Social Distance and Social Decisions," Econometrica, Econometric Society, vol. 65(5), pages 1005-1028, September.
    9. Hayakawa, Hiroaki & Venieris, Yiannis P, 1977. "Consumer Interdependence via Reference Groups," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 599-615, June.
    10. Cowan, R. & Cowan, W. & Swann, P., 1996. "A Model of Demand with Interactions Among Consumers," UWO Department of Economics Working Papers 9609, University of Western Ontario, Department of Economics.
    11. Corneo, Giacomo & Jeanne, Olivier, 1997. "Conspicuous consumption, snobbism and conformism," Journal of Public Economics, Elsevier, vol. 66(1), pages 55-71, October.
    12. Bagwell, Laurie Simon & Bernheim, B Douglas, 1996. "Veblen Effects in a Theory of Conspicuous Consumption," American Economic Review, American Economic Association, vol. 86(3), pages 349-73, June.
    13. Iannaccone, Laurence R., 1989. "Bandwagons and the threat of chaos : Interpersonal effects revisited," Journal of Economic Behavior & Organization, Elsevier, vol. 11(3), pages 431-442, May.
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