Dahlan, Rolan Mauludy and Situngkir, Hokky (2010): Evolution of Consumers’ Preferences due to Innovation. Forthcoming in: WP-6-2010 No. BFI Working Paper Series (29. July 2010)
Download (386Kb) | Preview
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.
|Item Type:||MPRA Paper|
|Original Title:||Evolution of Consumers’ Preferences due to Innovation|
|English Title:||Evolution of Consumers’ Preferences due to Innovation|
|Keywords:||Evolutionary economics, memetics, demand, evolution, innovation, transformation of consumer behavior|
|Subjects:||D - Microeconomics > D1 - Household Behavior and Family Economics > D11 - Consumer Economics: Theory
D - Microeconomics > D9 - Intertemporal Choice and Growth > D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving
D - Microeconomics > D4 - Market Structure and Pricing > D40 - General
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences; Diffusion Processes
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L16 - Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices
E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E11 - Marxian; Sraffian; Institutional; Evolutionary
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L15 - Information and Product Quality; Standardization and Compatibility
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development; Intellectual Property Rights > O31 - Innovation and Invention: Processes and Incentives
E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E20 - General
|Depositing User:||Hokky Situngkir|
|Date Deposited:||31. Jul 2010 01:25|
|Last Modified:||15. Feb 2013 23:25|
Smith, A. (1776) An Inquiry Into the Nature and Causes of the Wealth of Nations, ElecBook Classics.
Marshall, A. (1997) Principles of Economics, Prometheus Books.
Skousen, M. (2001) The Making of Modern Economics: The Lives and Ideas of The Great Thinkers, M.E. Sharpe, Inc.
Schumpeter, J. (1939) Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process, McGraw-Hill.
Groenewegen, P. (2007) Alfred Marshall: Economist 1842–1924, Palgrave Macmillan.
Schumpeter, J. (1997) Ten Great Economists: From Marx to Keynes, Routledge, Taylor & Francis Group.
Raffaelli, T. (2003) Marshall’s Evolutionary Economics, Routledge, Taylor & Francis Group.
Shionoya, Y. and T. Nishizawa (2008) Marshall and Schumpeter on Evolution: Economic Sociology of Capitalist Development, Edward Elgar.
Nelson, R. and S. Winter (1982) An Evolutionary Theory of Economic Change, The Belknap Press Of Harvard University Press.
Saviotti, P. P. (2003) Applied Evolutionary Economics: New Empirical Methods and Simulation Techniques, Edward Elgar.
Dawkins, R. (1989) The Selfish Gene, Second Edition, Oxford University Press.
Sartika, T. D. (2004) Tracing Cultural Evolution Through Memetics, Working Paper Series WPF2004, Bandung Fe Institute.
Situngkir, H. (2004) On Selfish Memes: Culture as Complex Adaptive System, Working Paper Series WPG2004, Bandung Fe Institute.
Khanafiah, D., H. Situngkir (2004) Innovation as Evolution: Phylomemetic of Cellphone Designs, Working Paper Series WPV2004, Bandung Fe Institute.
Situngkir, H. (2008) Evolutionary Clustering in Indonesian Ethnic Textile Motifs, Working Paper Series WP-VII-2008, Bandung Fe Institute.
Situngkir, H. (2008) Constructing the Phylomemetic Tree: Indonesian Tradition-Inspired Buildings, Working Paper Series WP-III-2008, Bandung Fe Institute.
Situngkir, H. (2008) Conjectures to the Memes of Indonesian Songs, Working Paper Series WP-VI-2008, Bandung Fe Institute.
Situngkir, H. (2008) Memetics of Ethno-clustering Analysis, Working Paper Series WP-3-2009, Bandung Fe Institute.
Situngkir, H. (2009) The Phylomemetics of Batik, Working Paper Series WP-8-2009, Bandung Fe Institute.
Khanafiah, D., H. Situngkir (2006) Innovation as Evolutionary Process, Working Paper Series WPA2006, Bandung Fe Institute.
Situngkir, H. (2008) The Computational Generative Patterns in Indonesian Batik, Working Paper Series WP-V-2008, Bandung Fe Institute.
Situngkir, H. (2008) Deconstructing Javanese Batik Motif: When Traditional Heritage Meets Computation, Working Paper Series WP-XIII-2008, Bandung Fe Institute.
Khanafiah, D., and H. Situngkir (2009) Computational Batik Motif Generation: Innovation of Traditional Heritage by Fractal Computation, Working Paper Series WP-2-2009, Bandung Fe Institute.
Situngkir, H. (2010) Exploitation of Memetics for Melodic Sequences Generation, Working Paper Series WP-2-2010, Bandung Fe Institute.
Robbins, L. (1932) An Essay on the Nature and Significance of Economic Science, Macmillan.
Payson, S. (1995) Product Evolution: What It Is and How It Can Be Measured, Eastern Economic Journal, Vol. 21, No. 2, Spring 1995, p.247-262.
Leon, N. (2006) Trends and patterns of evolution for product Innovation, shorter versions of this paper were presented at the Altshuller Institute Conference, TRIZCON2006, Milwaukee, WI USA, April 2006 and at the First IberoAmerican Congress on Technical Innovation, Puebla, MX, September 2006.
Garcia-Torres, M. A. (2009) Consumer Behaviour: Evolution of Preferences and The Search for Novelty, Working Papers No. 2009-005, United Nations University.
Krackhardt, D. (1994) Endogenous Preferences: A Structural Approach, The Heinz School of Public Policy and Management, Carnegie Mellon Universty.
Bisin, A. and T. Verdier (2001) The Economics of Cultural Transmission and the Dynamics of Preferences, Journal of Economic Theory, No. 97, p. 298-319.
Bentley, R. A. and P. Ormerod (2009) Tradition Versus Fashion in Consumer Choice, arXiv No. 0902.2976v1, physics.soc-ph, 17 February 2009.
Gen, M. and R. Cheng (1997) Genetic Algorithms & Engineering Design, Joh Willey & Sons.
Coley, D. A. (1999) An Introduction to Genetic Algorithms for Scientists and Engineers, World Scientific Publishing.
Mitchell, M. (1999) An Introduction to Genetic Algorithms, Fifth Printing, MIT Press.
Sznajd-Weron, K. and J. Sznajd (2000) Opinion Evolution In Closed Community, Int. J. Mod. Phys. C, Vol. 11, No. 6, p. 1157.
Sznajd-Weron, K (2005) Sznajd Model and Its Applications, Acta Physica Polonica B, Vol. 36, No. 8, p. 1001-11.
Cipra, B. A. (1987) An Introduction to the Ising Model, The American Mathematical Monthly, Vol. 94, No. 10, p. 937-59.
Sanchez, J. R. (2004) A modified one-dimensional Sznajd Model, arXiv:cond-mat/0408518v1.
Varian, H. R. (1992) Microeconomic Analysis, Third Edition, W. W. Norton and Company.
Newman, M. E. J. (2006) Power laws, Pareto distributions and Zipf’s Law, arXiv:cond-mat/0412004 v3.
Clauset, A., C. R. Shalizi, and M. E. J. Newman (2009) Power-Law Distributions In Empirical Data, arXiv:0706.1062v2
Ormerod, P., H. Johns, L. Smith (2003) An Agent-Based Model of the Extinction Patterns of Capitalism's Largest Firms, Volterra Consulting.
Ueno, H., T. Watanabe and M. Takayasu (2010) Life-span Distributions of Supermarket Products, Journal of Physics, Conference Series No. 221/012018, IOP Publishing.