Preferences and novelty
A multidisciplinary perspective
in Innovation by demand

This chapter examines how consumption fits into ‘evolutionary’ models of economic development. When only the supply side of growth is looked at in the presence of market satiation, both product and process innovations are complementary preconditions for sustainable economic growth. Without the introduction of new products, an increasing share of resources would remain unemployed. Neoclassical theory finds thinking about the case of consumer goods novelty particularly difficult, because the adoption of only a subset of new commodities can only be reconciled with an assumption of given preferences. Thus a critical question is how preferences for new commodities come into being, how new goods are adopted. This chapter explores the thinking on this topic of a number of writers, from a range of disciplines, including neoclassical economists, psychologists, and socio-biologists. It concludes that biological and psychological perspectives, fitted into frameworks of evolutionary economics, have much to tell us about the formation of preferences, and economists should be open to such diverse approaches if they are to understand the relationship between innovation and demand.

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Innovation by demand

An interdisciplinary approach to the study of demand and its role in innovation

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