En in this paper we model the development of consumption when there are interactions between consumers. The consumer recognizes three reference groups: peer, distinction, and aspiration. The interplay of aspiration and distinction can lead to ‘waves’ in consumption; for example, the avant-garde consumption of up-market pioneers is copied by other types of consumer. As the latter aspire to emulate the former, the former seek distinction by varying their consumption. A consumption activity may start up market, then gradually descend the social spectrum. More complex patterns with continuing cycles in consumption can also be found. Jel classification d11,d62.
|Journal||Canadian Journal of Economics-Revue Canadienne d'Economique|
|Publication status||Published - 1 Jan 2004|
Cowan, R., Cowan, W., & Swann, P. (2004). Waves in Consumption with Interdependence among Consumers. Canadian Journal of Economics-Revue Canadienne d'Economique, 37(1), 149-177. https://doi.org/10.1111/j.0008-4085.2004.008_1.x