The document discusses hierarchically structured consumer choice as an alternative to traditional utility maximization models in economics. It proposes that consumer choices are made through a hierarchical decision-making process where consumers narrow their options down through multiple steps and levels, taking into both monetary and non-monetary factors. Consumer choices evolve over time through individual learning as well as social and economic pressures, leading to the evolution of product categories, industries and consumption patterns.

1. Hierarchically Structured Consumer Choice in Evolutionary Economics EAEPE’2009 Annual Conference, Amsterdam 7 November 2009 Pavel Luksha (University of Hertfordshire, UK & Institute of Economics, Russia) Vladimir Maevsky (Institute of Economics, Russia)

8. Hierarchically structured consumer choice process … . ….. goods class: e.g., durable goods goods category: e.g., TV-sets sub-category: e.g., plasma panels sub-sub-category: e.g., size

9. Evolution of consumption: individual level variety of concrete goods for consumer incentives for revision existing set X new set X’ social pressures economic pressures ‘ internal’ pressures peer comparison experts advertising price changes budget changes curiousity tiredness / loss of interest key effects : - Veblenian - bandwagon - snob evolutionary variation of concrete goods in the consumption set