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A model of fashion: Endogenous preferences in social interaction

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  • Di Giovinazzo, Viviana
  • Naimzada, Ahmad

Abstract

The aim of this paper is to investigate the dynamics of the fashion cycle as originally described by Simmel (1904). The theoretical models used in the more recent economic literature (Coelho and McClure, 1993; Corneo and Jeanne, 1997; Karni and Schmeidler, 1990; Matsuyama, 1992; Stigler and Becker, 1977) have the undeniable advantage of making the cycle widely applicable, and consequently appropriate for the analysis of the most varied fields of consumption activity. However, in the process, the originality of Simmel's thought has been lost. Since they are built on the principles of standard economics, the above-mentioned models generally assume that preferences are exogenous and overlook the fact that individual tastes change in time, partly in line with choices previously made by the social group. The present paper proposes a model of the fashion cycle in which conspicuous consumption ‘snob’ and ‘bandwagon’ preferences (Leibenstein, 1950) are determined endogenously and depend on previous consumption experience, both personal and that of other consumers. Thus the particular contribution of this work in comparison to the preceding economic literature is dual in nature. By assuming preferences to be endogenous, it reflects more accurately the dynamics causing perpetual motion in the fashion cycle. By assuming preferences to be shaped through the social interaction of a heterogeneous community of individuals, the model manages to identify more closely the psycho-sociological nuances that, according to Simmel, give rise to the cycle.

Suggested Citation

  • Di Giovinazzo, Viviana & Naimzada, Ahmad, 2015. "A model of fashion: Endogenous preferences in social interaction," Economic Modelling, Elsevier, vol. 47(C), pages 12-17.
    • Handle: RePEc:eee:ecmode:v:47:y:2015:i:c:p:12-17
    DOI: 10.1016/j.econmod.2014.12.029
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    1. Karni, Edi & Schmeidler, David, 1990. "Fixed Preferences and Changing Tastes," American Economic Review, American Economic Association, vol. 80(2), pages 262-267, May.
    2. Ahmad K. Naimzada & Silvana Stefani & Anna Torriero (ed.), 2009. "Networks, Topology and Dynamics," Lecture Notes in Economics and Mathematical Systems, Springer, number 978-3-540-68409-1, October.
    3. Coelho, Philip R P & McClure, James E, 1993. "Toward an Economic Theory of Fashion," Economic Inquiry, Western Economic Association International, vol. 31(4), pages 595-608, October.
    4. Corneo, Giacomo & Jeanne, Olivier, 1997. "Conspicuous consumption, snobbism and conformism," Journal of Public Economics, Elsevier, vol. 66(1), pages 55-71, October.
    5. H. Leibenstein, 1950. "Bandwagon, Snob, and Veblen Effects in the Theory of Consumers' Demand," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 64(2), pages 183-207.
    6. repec:hoo:wpaper:e-92-11 is not listed on IDEAS
    7. Jess Benhabib & Richard H. Day, 1981. "Rational Choice and Erratic Behaviour," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 48(3), pages 459-471.
    8. Di Giovinazzo, Viviana & Naimzada, Ahmad, 2012. "… Do as the Romans do. A model of conformity with the endogenous formation of preferences," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(5), pages 654-658.
    9. Stigler, George J & Becker, Gary S, 1977. "De Gustibus Non Est Disputandum," American Economic Review, American Economic Association, vol. 67(2), pages 76-90, March.
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    Cited by:

    1. Ahmad Naimzada & Marina Pireddu, 2019. "A general equilibrium evolutionary model with generic utility functions and generic bell-shaped attractiveness maps, generating fashion cycle dynamics," Working Papers 401, University of Milano-Bicocca, Department of Economics, revised Mar 2019.
    2. Wei-Bin Zhang, 2017. "Fashion and Business Cycles with Snobs and Bandwagoners in a Multi-Sector Growth Model," Journal of Business, LAR Center Press, vol. 2(3), pages 1-13, May.
    3. Caravaggio, Andrea & Gori, Luca & Sodini, Mauro, 2022. "Endogenous preferences in a dynamic Cournot duopoly," Chaos, Solitons & Fractals, Elsevier, vol. 161(C).
    4. Ahmad Naimzada & Marina Pireddu, 2020. "A general equilibrium evolutionary model with two groups of agents, generating fashion cycle dynamics," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 43(1), pages 155-185, June.
    5. Cabo, Francisco & García-González, Ana, 2020. "Interaction and imitation with heterogeneous agents: A misleading evolutionary equilibrium," Journal of Economic Behavior & Organization, Elsevier, vol. 179(C), pages 152-174.
    6. Wei-Bin Zhang, 2016. "Fashion with Snobs and Bandwagoners in a Three-Type Households and Three-Sector Neoclassical Growth Model Representación del consumo: Modelo de Crecimiento Neoclásico con Tres Factores," Remef - The Mexican Journal of Economics and Finance, Instituto Mexicano de Ejecutivos de Finanzas. Remef, June.
    7. Leonardo Bargigli & Filippo Pietrini, 2023. "An agent based model of fads," Working Papers - Economics wp2023_01.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    8. Wei-Bin Zhang, 2016. "Fashion with Snobs and Bandwagoners in a Three-Type Households and Three-Sector Neoclassical Growth Model," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 11(2), pages 1-19, Julio-Sep.

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    More about this item

    Keywords

    Fashion cycles; Endogenous preferences; Snob and bandwagon effects; Bifurcation; Complex dynamics;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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