3.6. Typical Effects of Consumer Behavior - Consumer Psychology

Let us turn to the effects that reflect the most typical behaviors that create non-functional demand ²⁵ . They show that real consumer behavior is different from the behavior of the "economic man." In the theory of demand (one of the fundamental concepts of neoclassical political economy), the inverse dependence of the quantity of goods purchased from its price is expressed by a continuous demand curve. In practice, the relationship between price and quantity of goods purchased is not continuous.

The effect of "bandwagon" (bandwagon effect or the effect of a general carriage, connection) is that the goods are bought not because of necessity, but because of the desire not to be left behind others, to be like everyone else. This effect indicates the consumer's orientation to a certain social norm.

The effect of "snob" expresses, on the contrary, the desire to differ from others, to stand out from the "crowd", so the necessary product is not acquired when it is available to others.

Veblen's effect is peculiar to indicative demonstrative consumption (based on the opinions of other people). It is associated with the influence of prices, and paradoxically, when the increase in price increases the demand for goods and, conversely, a decrease in price reduces the number of purchases. The effect of Veblen realizes the need for respect.

Close to it is the effect of "price-quality", based on the conclusion that a higher price always corresponds to a higher quality.

The effect of "loyalty to quality" is also triggered , caused by a stable predisposition to a certain company or trademark, which can act as an authority, a guarantor when buying unfamiliar, new or not typical products of this company.

The mechanism of temporal preferences when buying is peculiar. For example, it was found that when buying electrical appliances, cheaper but less economical goods are preferred. According to prospect theory, we often unduly discount future costs ²⁶ .