|Dr. Zakaria Babutsidze
Essays on Economies with Heterogenous Interacting Consumers
The current thesis is concerned with the importance of the consumer interaction for deriving aggregate implications in theoretical models. Applications discussed include advertising and R&D policies. The thesis demonstrates that changes in structure and intensity of consumer interaction can drastically change the aggregate behaviour of demand. As a result, it warns that basing firm and government policies on theoretical models ignoring, or not accurately modeling, consumer behaviour might lead to outcomes that are far from the desired ones.