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Consumer heterogeneity evolving from social group dynamics. Latent class analyses of German footwear consumption 1980-1991

  • A. Frenzel Baudisch

Boundedly rational consumers rely on their social environment as a source of information. Drawing upon psychological theories about social comparison processes, we hypothesize that social reference groups underlie market segments. New reference groups can emerge from social comparison processes, leading to the establishment of new submarkets and the evolution of aggregate consumer heterogeneity. These propositions are tested with series of cross-sectional surveys on footwear consumption of German men between 1980 and 1991. Using latent class models, we describe the emergence of the submarket for athletic shoes as a function of the appearance and establishment of a new social consumer group.

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Paper provided by Philipps University Marburg, Department of Geography in its series Papers on Economics and Evolution with number 2006-04.

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Length: 35 pages
Date of creation: May 2006
Date of revision:
Handle: RePEc:esi:evopap:2006-04
Contact details of provider: Postal: Deutschhausstrasse 10, 35032 Marburg
Phone: 064212824257
Fax: 064212828950
Web page: http://www.uni-marburg.de/fb19/Email:


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  1. Malerba, Franco, et al, 1999. "'History-Friendly' Models of Industry Evolution: The Computer Industry," Industrial and Corporate Change, Oxford University Press, vol. 8(1), pages 3-40, March.
  2. Paul Windrum, 2005. "Heterogeneous preferences and new innovation cycles in mature industries: the amateur camera industry 1955--1974," Industrial and Corporate Change, Oxford University Press, vol. 14(6), pages 1043-1074, December.
  3. Janssen, Marco A. & Jager, Wander, 2001. "Fashions, habits and changing preferences: Simulation of psychological factors affecting market dynamics," Journal of Economic Psychology, Elsevier, vol. 22(6), pages 745-772, December.
  4. Mark Bils & Peter J. Klenow, 2001. "The Acceleration of Variety Growth," American Economic Review, American Economic Association, vol. 91(2), pages 274-280, May.
  5. Abernathy, William J. & Clark, Kim B., 1985. "Innovation: Mapping the winds of creative destruction," Research Policy, Elsevier, vol. 14(1), pages 3-22, February.
  6. Bhatnagar, Amit & Ghose, Sanjoy, 2004. "A latent class segmentation analysis of e-shoppers," Journal of Business Research, Elsevier, vol. 57(7), pages 758-767, July.
  7. Ron Adner & Daniel Levinthal, 2001. "Demand Heterogeneity and Technology Evolution: Implications for Product and Process Innovation," Management Science, INFORMS, vol. 47(5), pages 611-628, May.
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