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Consumer behaviour: evolution of preferences and the search for novelty

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  • Garcia-Torres, Abraham

    (UNU-MERIT, Maastricht University)

Abstract

Evolution of consumers' preferences has been recognized by many scholars as being key to understanding technological change. However, mainstream economics cannot account for the seemingly irrational behavior of consumers based on changes in taste – consumer theory lacks exibility and accuracy to explain changes in consumer behavior. Adopting a behavioral psychology perspective, this paper argues that there is a rational pattern in the change of consumers' tastes. I argue that behavioral psychology offers us a unique perspective to solve some of the paradoxes of consumer behavior. This paper incorporates exibility into CES utility function to more adequately account for, and differentiate between, habit formation routines. A model is developed in which habit formation and consumption of new goods are interrelated.

Suggested Citation

  • Garcia-Torres, Abraham, 2009. "Consumer behaviour: evolution of preferences and the search for novelty," MERIT Working Papers 2009-005, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2009005
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    Cited by:

    1. Erika Loučanová & Ján Parobek & Martina Nosáľová & Dopico Ana & Daniela Hupková, 2020. "Perception of Intelligent Packaging in the Context of Bioeconomy," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 30(3), pages 77-89, September.
    2. Abraham Garcia, 2011. "The relevance of marketing in the success of innovations," JRC Working Papers on Corporate R&D and Innovation 2011-09, Joint Research Centre.
    3. Dahlan, Rolan Mauludy & Situngkir, Hokky, 2010. "Evolution of Consumers’ Preferences due to Innovation," MPRA Paper 24159, University Library of Munich, Germany.

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    More about this item

    Keywords

    Consumer behaviour; Consumer choice; Technological change; Innovations;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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