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Evolution of Consumers’ Preferences due to Innovation

  • Dahlan, Rolan Mauludy
  • Situngkir, Hokky

The integration process between evolutionary approach and conventional economic analysis is very essential for the next development of economic studies, especially in the fundamental concepts of modern economics: supply and demand analysis. In this presentation, we use the concept of meme to explore evolution of demand. This study offers an evolutionary model of demand, which views utility as a function of the distance between the two types of sequences of memes (memeplex), which represent economic product and consumer preference. It is very different from the conventional approach of demand, which only views utility as a function of quantity. This modification provides an opportunity to see innovation and transformation of consumer preferences in the demand perspective. Innovation is seen as a change in sequence of memes in economic products, while the transformation of consumer behavior is defined as a change in the aligning memes of consumer preference. Demand quantity is the result of the selection process. This model produces some interesting characteristics, such as: (i) quantitative and qualitative properties of evolution of demand, (ii) relationship between consumer behavior and properties of evolution of demand that occurred and (iii) power law on the distribution of product lifetime. At the end we show the improvement of utility function, in the concept of meme, might create a new landscape for the further development of economics.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 24159.

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Date of creation: 29 Jul 2010
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Handle: RePEc:pra:mprapa:24159
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  1. Bisin, Alberto & Verdier, Thierry, 2001. "The Economics of Cultural Transmission and the Dynamics of Preferences," Journal of Economic Theory, Elsevier, vol. 97(2), pages 298-319, April.
  2. Steven Payson, 1995. "Product Evolution: What It Is and How It Can Be Measured," Eastern Economic Journal, Eastern Economic Association, vol. 21(2), pages 247-262, Spring.
  3. Tiktik Dewi Sartika, 2004. "Tracing Cultural Evolution Through Memetics," Computational Economics 0405007, EconWPA.
  4. Katarzyna Sznajd-Weron & Jozef Sznajd, 2000. "Opinion evolution in closed community," HSC Research Reports HSC/00/04, Hugo Steinhaus Center, Wroclaw University of Technology.
  5. Garcia-Torres, Abraham, 2009. "Consumer behaviour: evolution of preferences and the search for novelty," MERIT Working Papers 005, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  6. Hokky Situngkir, 2004. "On Selfish Memes: culture as complex adaptive system," Computational Economics 0405001, EconWPA.
  7. Deni Khanafiah & Hokky Situngkir, 2004. "Innovation as Evolution," Industrial Organization 0412009, EconWPA.
  8. Katarzyna Sznajd-Weron, 2005. "Sznajd model and its applications," HSC Research Reports HSC/05/04, Hugo Steinhaus Center, Wroclaw University of Technology.
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