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Cash and the Counter: Capabilities and Preferences in the Demand for Banking Technologies

  • Davide Consoli

    (CRIC - Institute of Innovation Research, University of Manchester UK)

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    The main argument of this paper is that consumption and demand, like production, are discovery processes guided by trial-and-error and learning by consuming. The key question that is addressed is: how do consumers deal with innovation? By bringing together a number of threads within the innovation literature my claim is that consumers, akin to firms, follow routines that shape their consumption bundle, conceived here as an ensemble of activities rather than a bunch of goods. The analysis developed in the paper takes a very specific angle by elaborating on empirical evidence on the patterns of use of retail payment services in the United Kingdom to appreciate how consumption and demand can be shaped by the intertwined evolution of capabilities and preferences.

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    Paper provided by EconWPA in its series Industrial Organization with number 0511001.

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    Length: 37 pages
    Date of creation: 08 Nov 2005
    Date of revision:
    Handle: RePEc:wpa:wuwpio:0511001
    Note: Type of Document - pdf; pages: 37
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    2. Metcalfe, John S. & Foster, John & Ramlogan, Ronnie, 2003. "Adaptive Economic Growth," Centre on Regulation and Competition (CRC) Working papers 30637, University of Manchester, Institute for Development Policy and Management (IDPM).
    3. Consoli, Davide, 2005. "Technological cooperation and product substitution in UK retail banking: the case of customer services," Information Economics and Policy, Elsevier, vol. 17(2), pages 199-215, March.
    4. Davide Consoli, 2005. "Changing boundaries and structure of a technological system: lessons from UK retail banking," Development and Comp Systems 0506004, EconWPA.
    5. Pollak, Robert A, 1970. "Habit Formation and Dynamic Demand Functions," Journal of Political Economy, University of Chicago Press, vol. 78(4), pages 745-63, Part I Ju.
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    8. Richard N. Langlois & Metin M. Cosgel, 1996. "The Organization of Consumption," Working papers 1996-07, University of Connecticut, Department of Economics.
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    12. Cowan, Robin & Cowan, William & Swann, Peter, 1997. "A model of demand with interactions among consumers," International Journal of Industrial Organization, Elsevier, vol. 15(6), pages 711-732, October.
    13. Consoli, Davide, 2005. "The dynamics of technological change in UK retail banking services: An evolutionary perspective," Research Policy, Elsevier, vol. 34(4), pages 461-480, May.
    14. Davide Consoli, 2005. "Changing boundaries and structure of a technological system: lessons from UK retail banking," Industrial Organization 0506006, EconWPA.
    15. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762.
    16. Langlois, Richard N & Foss, Nicolai J, 1999. "Capabilities and Governance: The Rebirth of Production in the Theory of Economic Organization," Kyklos, Wiley Blackwell, vol. 52(2), pages 201-18.
    17. Dosi, Giovanni, 1997. "Opportunities, Incentives and the Collective Patterns of Technological Change," Economic Journal, Royal Economic Society, vol. 107(444), pages 1530-47, September.
    18. Antonelli, Cristiano, 2001. "The Microeconomics of Technological Systems," OUP Catalogue, Oxford University Press, number 9780199245536, July.
    19. Stigler, George J & Becker, Gary S, 1977. "De Gustibus Non Est Disputandum," American Economic Review, American Economic Association, vol. 67(2), pages 76-90, March.
    20. Richard N. Langlois, 2000. "Knowledge, Consumption, and Endogenous Growth," Working papers 2000-02, University of Connecticut, Department of Economics.
    21. Brian J. Loasby, 2000. "Market institutions and economic evolution," Journal of Evolutionary Economics, Springer, vol. 10(3), pages 297-309.
    22. Sen, Amartya K, 1973. "Behaviour and the Concept of Preference," Economica, London School of Economics and Political Science, vol. 40(159), pages 241-59, August.
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