Social norms and income distribution in conspicuous consumption: on the diffusion of consumer good innovationinvaders

Andreas Reinstaller, MERIT, Maastricht University, the Netherlands

This paper presents a simple evolutionary model to study the diffusion pat-terns
of product innovations for consumer goods under different constellations of
social norms and income distribution. Following a Veblenian theme, we interpret
consumption as a social activity, where a lower social class aspires to the consump-tion
pattern of the upper class and the leading class in turn seeks distinction. This
process is constrained by social norms and income distribution, which are char-acteristics
of the involved social groups. We find that social norms establishing
behavioral coherence slow the speed of diffusion down. Societies that allow for
more behavioral variety will experience a higher rate of adoption of new consumer
goods. We also find that the speed of diffusion as well as the saturation levels
reached highly depend on the distribution of income. Combining these two effects,
we conclude that behavioral variety and a more even distribution of income domi-nate
any other social set-up in terms of the speed of adoption of product innovations
and the final market penetration.

Date: 15 April-00 0000