Year: 1978
Type: report
Abstract: It seems probable that the contemporary microeconomic model of the consumer could be adapted to incorporate a more realistic description of ordinary human behavior. For many years economists have tolerated the amalgam of good sense and bad psychology which is their microeconomic theory because of the empirical plausibility of its predictions. There is growing pressure to expand the limits of this theory, however, and by now it has become common for empirical regularities to be rationalized in terms of variables which never have had a secure place in the theory, or which even may be in open conflict with it. This is exemplified by Houthakker's and Taylor's (1970) use of a consumer's "stock of habits" as a var.3ble in their demand equations, and by Katona's (1960) appeal to low levels of "consumer confidence " in his rationalization of the observation that consumer saving rates tend to-increase in times of unusual inflation. Of course,,it is possible that these are merely cases in which economists have taken unconventional lines on situations in
Author: John G. Cross
Language: English
Subfield: General Decision Sciences
Field: Decision Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W592640576