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Evolution of Consumers’ Preferences due to Innovation

Mauludy, Rolan and Situngkir, Hokky (2010) Evolution of Consumers’ Preferences due to Innovation. [Preprint]

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Abstract

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:Preprint
Keywords:Evolutionary economics, memetics, demand, evolution, innovation, transformation of consumer behavior.
Subjects:Psychology > Applied Cognitive Psychology
Biology > Evolution
Computer Science > Complexity Theory
Computer Science > Dynamical Systems
Computer Science > Statistical Models
Electronic Publishing > Economics
Philosophy > Decision Theory
Psychology > Social Psychology
ID Code:6904
Deposited By:Situngkir, Mr Hokky
Deposited On:06 Aug 2010 12:18
Last Modified:11 Mar 2011 08:57

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