Skip to main content

Diversity, persistence and chaos in consumption patterns

Abstract

In this paper we present a model from which discretionary consumption dynamics can be analyzed as global properties emerging from the endogenous transformation of a society inhabited by boundedly rational interactive consumers. By considering local and global interactions among consumers, we show that behavioral diversity plays a central role in the evolution of consumption patterns. The analysis of the model reveals the existence of a regime characterized by the persistence of different social standards, and a time evolution of the social distribution of behavioral patterns towards a heteroclinic cycle. In some cases the evolution seems to be chaotic, generating unpredictable, erratic dynamics of the aggregate social indices (average or social propensity for discretionary consumption).

This is a preview of subscription content, access via your institution.

References

  1. Aguiar, M., Castro, S., & Laboriau, I. (2004). Dynamics near a heteroclinic network. Preprint, Centro de Matemática da Universidade do Porto.

  2. Aversi R., Dosi G., Fagiolo G., Meacci M., Olivetti C. (1999) Demand dynamics with socially evolving preferences. Industrial and Corporate Change 8: 353–399

    Article  Google Scholar 

  3. Baudrillard, J. (1981). For a critique of the political economy of the signs. St. Louis: Telos Press.

  4. Becker G.S. (1996) Accounting for tastes. Harvard University Press, Cambridge

    Google Scholar 

  5. Bernheim B.D. (1994) A theory of conformity. Journal of Political Economy 102(5): 841–877

    Article  Google Scholar 

  6. Bourdieu P. (1979) La Distinction. Minuit, Paris

    Google Scholar 

  7. Brannath W. (1994) Heteroclinic networks on the tetrahedron. Nonlinearity 7: 1367–1384

    Article  Google Scholar 

  8. Chawanya T. (1995) A new type of irregular motion in a class of game dynamics systems. Progress of Theoretical Physics 94: 163–179

    Article  Google Scholar 

  9. Corneo G., Jeanne O. (1999) Segmented communication and fashionable behavior. Journal of Economic Behavior & Organization 39: 371–385

    Article  Google Scholar 

  10. Cowan R., Cowan W., Swann P. (1997) A model of demand with interactions among consumers. International Journal of Industrial Organization 15: 711–732

    Article  Google Scholar 

  11. Deaton A. (1992) Understanding consumption. Oxford University Press, Oxford

    Book  Google Scholar 

  12. Earl P.E. (1986) Lifestyle economics: Consumer behavior in a turbulent world. Brighton, Wheatsheaf

    Google Scholar 

  13. Earl P.E. (1998) Consumer goals as journeys into the unknown. In: M. Bianchi (eds) The active consumer. Routledge, London

    Google Scholar 

  14. Granovetter M., Soong R. (1986) Threshold models of interpersonal effects in consumer demand. Journal of Economic Behavior and Organization 7: 83–99

    Article  Google Scholar 

  15. Gualerzi D. (2001) Consumption and growth: Recovery and structural change in the US Economy. Cheltenham, Edward Elgar

    Google Scholar 

  16. Guckenheimer J., Worfolk P. (1992) Instant chaos. Nonlinearity 5: 1211–1222

    Article  Google Scholar 

  17. Hodgson G. (2000) The hidden persuaders. Institutions and choice in economic theory. University of Hertfordshire, Inaugural Lecture

    Google Scholar 

  18. Hofbauer J., Sigmund K. (1998) Evolutionary games and population dynamics. Cambridge University Press, Cambridge

    Google Scholar 

  19. Lancaster K.J. (1966) A new approach to consumer theory. Journal of Political Economy 4: 132–157

    Article  Google Scholar 

  20. Langlois, R. N. (2001). Knowledge, consumption and endogenous growth. Journal of Evolutionary Economics, 11.

  21. Leiss, W. (1983). The icons of the market place. Theory, Culture and Society, 1(3).

  22. Loasby B. (2001) Cognition, imagination and institutions in demand creation. Journal of Evolutionary Economics 11: 7–21

    Article  Google Scholar 

  23. Melbourne I. (1991) An example of a non-asymptotically stable attractor. Nonlinearity 4: 835–844

    Article  Google Scholar 

  24. Metcalfe S. (2001) Consumption, preferences and the evolutionary agenda. Journal of Evolutionary Economics 11: 37–58

    Article  Google Scholar 

  25. Schor J. (1999) The overspent American. Harper Perennial, New York

    Google Scholar 

  26. Scitovsky T. (1976) The joyless economy. An inquiry into human satisfaction and consumer dissatisfaction. Oxford University Press, Oxford

    Google Scholar 

  27. Simon H.A. (1983) Reason in human affairs. Stanford University Press, Stanford

    Google Scholar 

  28. Sobel E. (1982) Lifestyle. Academic Press, New York

    Google Scholar 

  29. Stigler G.J., Becker G.S. (1977) De gustibus non est disputandum. American Economic Review 67: 76–90

    Google Scholar 

  30. Turab R., Abu S., Sethi R. (1998) Novelty, imitation and habit formation in a Scitovskian model of consumption. In: Bianchi M. (eds) The active consumer. Routledge, London

    Google Scholar 

  31. Veblen T. (1899) The theory of the leisure class. Macmillan, London

    Google Scholar 

  32. Witt, U. (eds) (2001) Escaping satiation. The demand side of economic growth. Springer-Verlag, Berlin

    Google Scholar 

Download references

Author information

Affiliations

Authors

Corresponding author

Correspondence to Francisco Fatás-Villafranca.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Fatás-Villafranca, F., Saura, D. & Vazquez, F.J. Diversity, persistence and chaos in consumption patterns. J Bioecon 11, 43–63 (2009). https://doi.org/10.1007/s10818-009-9059-8

Download citation

Keywords

  • Discretionary consumption
  • Externalities
  • Evolutionary dynamics
  • Chaos

JEL Classification

  • E21
  • C61
  • B52