A Behavioral Model of Conumption Patterns: The Effects of Cognitive Dissonance and Conformity

A. Nir

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    Abstract

    Cognitive dissonance causes people to rationalize actions that differ from their own preferences.Conformity, on the other hand, causes people to change their behavior as a result of pressure from others.This paper investigates the consequences of preference dynamic that occur when individuals rationalize their preferences, are conformists and have a minimum consumption constraint.The main results are: (1) Individuals who have a greater tendency toward conformity will rationalize their preferences to a greater degree, (2) Individuals' optimal consumption pattern will be unstable and scatter over time, (3) Average consumption in society will increase along a cyclical path and (4) An increase in either cognitive dissonance or conformity induces greater volatility of average consumption.
    Original languageEnglish
    Place of PublicationTilburg
    PublisherMicroeconomics
    Number of pages32
    Volume2004-48
    Publication statusPublished - 2004

    Publication series

    NameCentER Discussion Paper
    Volume2004-48

    Keywords

    • rationality
    • cognitive science
    • consumption
    • volatility

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    Nir, A. (2004). A Behavioral Model of Conumption Patterns: The Effects of Cognitive Dissonance and Conformity. (CentER Discussion Paper; Vol. 2004-48). Microeconomics.