Narcissistic withdrawal

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Narcissistic_withdrawal 

In psychology, narcissistic withdrawal is a stage in narcissism and a narcissistic defense characterized by "turning away from parental figures, and by the fantasy that essential needs can be satisfied by the individual alone". In adulthood, it is more likely to be an ego defense with repressed origins. Individuals feel obliged to withdraw from any relationship that threatens to be more than short-term, avoiding the risk of narcissistic injury, and will instead retreat into a comfort zone. The idea was first described by Melanie Klein in her psychoanalytic research on stages of narcissism in children.

Psychoanalysis

Sigmund Freud originally used the term narcissism to denote the process of the projection of the individual's libido from its object onto themselves; his essay "On Narcissism" saw him explore the idea through an examination of such everyday events as illness or sleep: "the condition of sleep, too, resembles illness in implying a narcissistic withdrawal of the positions of the libido on to the subject's own self". Later, in "Mourning and Melancholia", he examined how "a withdrawal of the libido [...] on a narcissistic basis" in depression could allow both a freezing and a preservation of affection: "by taking flight into the ego, love escapes extinction".

Otto Fenichel would extend his analysis to borderline conditions, demonstrating how "in a reactive withdrawal of libido [...], a regression to narcissism is also a regression to the primal narcissistic omnipotence which makes its reappearance in the form of megalomania".

For Melanie Klein, however, a more positive element came to the forefront: "frustration, which stimulates narcissistic withdrawal, is also [...] a fundamental factor in adaptation to reality". Similarly, D. W. Winnicott observed "that there is an aspect of withdrawal that is healthy", considering that it might be "helpful to think of withdrawal as a condition in which the person concerned (child or adult) holds a regressed part of the self and nurses it, at the expense of external relationships".

Differing from the prior perspectives of psychoanalysts, Heinz Kohut considered that "the narcissistically vulnerable individual responds to actual (or anticipated) narcissistic injury either with shamefaced withdrawal or with narcissistic rage". Otto Kernberg also saw the difference between normal narcissism and "pathological narcissism...[as] withdrawal into "splendid isolation"" in the latter instance; while Herbert Rosenfeld was concerned with "states of withdrawal commonly seen in narcissistic patients in which death is idealised as superior to life", as well as with "the alternation of states of narcissistic withdrawal and ego disintegration".

Schizoid withdrawal

Closely related to narcissistic withdrawal is schizoid withdrawal, "the escape from too great pressure by abolishing emotional relationships altogether in favour of an introverted and withdrawn personality". These "fantastic refuges from need are forms of emotional starvation, megalomanias and distortions of reality born of fear" that maladaptively complicate an individual's capacity to enjoy a relationship.

Sociology

"Narcissists will isolate themselves, leave their families, ignore others, do anything to preserve a special [...] sense of self". Arguably, however, all such "narcissistic withdrawal is haunted by its alter ego: the ghost of a full social presence" – with people living their lives "along a continuum which ranges from the maximal degree of social commitment [...] to a maximal degree of social withdrawal".

If "of all modes of narcissistic withdrawal, depression is the most crippling", a contributing factor may be that "depressed persons come to appreciate consciously how much social effort is in fact required in the normal course of keeping one's usual place in undertakings".

Therapy

Object relations theory would see the process of therapy as one whereby the therapist enabled his or her patient to have "resituated the object from the purely schizoid usage to the shared schizoid usage (initially) until eventually [...] the object relation – discussing, arguing, idealizing, hating, etc. – emerged".

Fenichel considered that in patients where "their narcissistic regression is a reaction to narcissistic injuries; if they are shown this fact and given time to face the real injuries and to develop other types of reaction, they may be helped enormously" Neville Symington however estimated that "often a kind of war develops between analyst and patient, with the analyst trying to haul the patient out of the cocoon [...] his narcissistic envelope [...] and the patient pulling for all his worth in the other direction".

Cultural analogues

In Joanne Greenberg's novel I Never Promised You a Rose Garden, the therapist of the protagonist wonders "if there is a pattern.... You give up a secret to our view and then you get so scared that you run for cover into your panic or into your secret world. To live there."

More generally, the 1920s have been described as a time of "changes in which women were channelled toward narcissistic withdrawal rather than developing strong egos".

Consumerism

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Consumerism

An electronics store displaying CRT TVs in a shopping mall in Jakarta, Indonesia (2002)

Consumerism is a socio-cultural and economic phenomenon that is typical of industrialized societies. It is characterized by the continuous acquisition of goods and services in ever-increasing quantities. In contemporary consumer society, the purchase and the consumption of products have evolved beyond the mere satisfaction of basic human needs, transforming into an activity that is not only economic but also cultural, social, and even identity-forming. It emerged in Western Europe and the United States during the Industrial Revolution and became widespread around the 20th century. In economics, consumerism refers to policies that emphasize consumption. It is the consideration that the free choice of consumers should strongly inform the choice by manufacturers of what is produced and how, and therefore influence the economic organization of a society.

Consumerism has been criticized by both individuals who choose other ways of participating in the economy (i.e. choosing simple living or slow living) and environmentalists concerned about its impact on the planet. Experts often assert that consumerism has physical limits, such as growth imperative and overconsumption, which have larger impacts on the environment. This includes direct effects like overexploitation of natural resources or large amounts of waste from disposable goods and significant effects like climate change. Similarly, some research and criticism focuses on the sociological effects of consumerism, such as reinforcement of class barriers and creation of inequalities.

Evolution of the term

The term "consumerism" has several definitions. These definitions may not be related to each other and they conflict with each other.

In a 1955 speech, John Bugas, a vice president of the Ford Motor Company, coined the term "consumerism" as a substitute for "capitalism" and better describe the American economy:

The term consumerism would pin the tag where it actually belongs – on Mr. Consumer, the real boss and beneficiary of the American system. It would pull the rug right out from under our unfriendly critics who have blasted away so long and loud at capitalism.

Bugas's definition aligned with Austrian economics founder Carl Menger's conception of consumer sovereignty, as laid out in his 1871 book Principles of Economics, whereby consumer preferences, valuations, and choices control the economy entirely. This view stood in direct opposition to Karl Marx's critique of the capitalist economy as a system of exploitation.

For social critic Vance Packard, however, "consumerism" was not a positive term about consumer practices but rather a negative term, meaning excessive materialism and wastefulness. In the advertisements for his 1960 book The Waste Makers, the word "consumerism" was prominently featured in a negative way.

One sense of the term relates to efforts to support consumers' interests. By the early 1970s it had become the accepted term for the field and began to be used in these ways:

1. Consumerism is the concept that consumers should be informed decision makers in the marketplace. In this sense consumerism is the study and practice of matching consumers with trustworthy information, such as product testing reports.
2. Consumerism is the concept that the marketplace itself is responsible for ensuring social justice through fair economic practices. Consumer protection policies and laws compel manufacturers to make products safe.
3. Consumerism refers to the field of studying, regulating, or interacting with the marketplace. The consumer movement is the social movement which refers to all actions and all entities within the marketplace which give consideration to the consumer.

While the above definitions were becoming established, other people began using the term consumerism to mean "high levels of consumption". This definition has gained popularity since the 1970s and began to be used in these ways:

1. Consumerism is the selfish and frivolous collecting of products, or economic materialism. In this sense consumerism is negative and in opposition to positive lifestyles of anti-consumerism and simple living.
2. Consumerism is a force from the marketplace which destroys individuality and harms society.^[3] It is related to globalization and in protest against this some people promote the "anti-globalization movement".

History

Origins

The consumer society developed throughout the late 17th century and the 18th century. Peck addresses the assertion made by consumption scholars about writers such as "Nicholas Barbon and Bernard Mandeville" in "Luxury and War: Reconsidering Luxury Consumption in Seventeenth-Century England" and how their emphasis on the financial worth of luxury changed society's perceptions of luxury. They argue that a significant transformation occurred in the eighteenth century when the focus shifted from court-centered luxury spending to consumer-driven luxury consumption, which was fueled by middle-class purchases of new products.

The English economy expanded significantly in the 17th century due to new methods of agriculture that rendered it feasible to cultivate a larger area. A time of heightened demand for luxury goods and increased cultural interaction was reflected in the wide range of luxury products that the aristocracy and affluent merchants imported from nations like Italy and the Low Countries. This expansion of luxury consumption in England was facilitated by state policies that encouraged cultural borrowing and import substitution, hence enabling the purchase of luxury items. Luxury goods included sugar, tobacco, tea, and coffee; these were increasingly grown on vast plantations (historically by slave labor) in the Caribbean as demand steadily rose. In particular, sugar consumption in Britain increased by a factor of 20 during the 18th century.

Furthermore, the non-importation movement commenced in the 18th century, more precisely from 1764 to 1776, as Witkowski's article "Colonial Consumers in Revolt: Buyer Values and Behavior during the Nonimportation Movement, 1764–1776" discusses. He describes the evolving development of consumer culture in the context of "colonial America". An emphasis on efficiency and economical consumption gave way to a preference for comfort, convenience, and importing products. During this time of transformation, colonial consumers had to choose between rising material desires and conventional values.

Culture of consumption

Bernard Mandeville's work Fable of the Bees, which justified conspicuous consumption

The pattern of intensified consumption became particularly visible in the 17th century in London, where the gentry and prosperous merchants took up residence and promoted a culture of luxury and consumption that slowly extended across socio-economic boundaries. Marketplaces expanded as shopping centres, such as the New Exchange, opened in 1609 by Robert Cecil in the Strand. Shops started to become important as places for Londoners to meet and socialize and became popular destinations alongside the theatre. From 1660, Restoration London also saw the growth of luxury buildings as advertisements for social position, with speculative architects like Nicholas Barbon and Lionel Cranfield operating. This then-scandalous line of thought caused great controversy with the publication of the influential work Fable of the Bees in 1714, in which Bernard Mandeville argued that a country's prosperity ultimately lay in the self-interest of the consumer.

Josiah Wedgwood's pottery, a status symbol of consumerism in the late 18th century

The pottery entrepreneur and inventor, Josiah Wedgwood, noticed the way that aristocratic fashions, themselves subject to periodic changes in direction, slowly filtered down through different classes of society. He pioneered the use of marketing techniques to influence and manipulate the movement of prevailing tastes and preferences to cause the aristocracy to accept his goods; it was only a matter of time before the middle classes also rapidly bought up his goods. Other producers of a wide range of other products followed his example, and the spread and importance of consumption fashions became steadily more important. Since then, advertising has played a major role in fostering a consumerist society, marketing goods through various platforms in nearly all aspects of human life, and pushing the message that the potential customer's personal life requires some product.

Mass production

Main article: Mass production

The Industrial Revolution dramatically increased the availability of consumer goods, although it was still primarily focused on the capital goods sector and industrial infrastructure (i.e., mining, steel, oil, transportation networks, communications networks, industrial cities, financial centers, etc.). The advent of the department store represented a paradigm shift in the experience of shopping. Customers could now buy an astonishing variety of goods, all in one place, and shopping became a popular leisure activity. While previously the norm had been the scarcity of resources, the industrial era created an unprecedented economic situation. For the first time in history products were available in outstanding quantities, at outstandingly low prices, therefore available to virtually everyone in the industrialized West.

By the turn of the 20th century, the average worker in Western Europe or the United States still spent approximately 80–90% of their income on food and other necessities. What was needed to propel consumerism, was a system of mass production and consumption, exemplified by Henry Ford, an American car manufacturer. After observing the assembly lines in the meat-packing industry, Frederick Winslow Taylor brought his theory of scientific management to the organization of the assembly line in other industries; this unleashed incredible productivity and reduced the costs of commodities produced on assembly lines around the world.

Black Friday shoppers, DC USA

Consumerism has long had intentional underpinnings, rather than just developing out of capitalism. As an example, Earnest Elmo Calkins noted to fellow advertising executives in 1932 that "consumer engineering must see to it that we use up the kind of goods we now merely use", while the domestic theorist Christine Frederick observed in 1929 that "the way to break the vicious deadlock of a low standard of living is to spend freely, and even waste creatively".

The older term and concept of "conspicuous consumption" originated at the turn of the 20th century in the writings of sociologist and economist Thorstein Veblen. The term describes an apparently irrational and confounding form of economic behaviour. Veblen's scathing proposal that this unnecessary consumption is a form of status display is made in darkly humorous observations like the following:

It is true of dress in even a higher degree than of most other items of consumption, that people will undergo a very considerable degree of privation in the comforts or the necessaries of life to afford what is considered a decent amount of wasteful consumption; so that it is by no means an uncommon occurrence, in an inclement climate, for people to go ill clad to appear well dressed.

The term "conspicuous consumption" spread to describe consumerism in the United States in the 1960s, but was soon linked to debates about media theory, culture jamming, and its corollary productivism.

By 1920 most Americans had experimented with occasional installment buying.

Television and American consumerism

The advent of the television in the late 1940s proved to be an attractive opportunity for advertisers, who could reach potential consumers in the home using lifelike images and sound. The introduction of mass commercial television positively impacted retail sales. The television motivated consumers to purchase more products and upgrade whatever they currently had. In the United States, a new consumer culture developed centered around buying products, especially automobiles and other durable goods, to increase their social status. Woojin Kim of the University of California, Berkeley, argues that sitcoms of this era also helped to promote the idea of suburbia.

According to Woojin, the attraction of television advertising has brought an improvement in Americans' social status. Watching television programs has become an important part of people's cultural life. Television advertising can enrich and change the content of advertising from hearing and vision and make people in contact with it. The image of television advertising is realistic, and it is easy to have an interest and desire to buy advertising goods, At the same time, the audience intentionally or unintentionally compares and comments on the advertised goods while appreciating the TV advertisements, arouses the interest of the audience by attracting attention, and forms a buying idea, which is conducive to enhancing the buying confidence. Therefore, TV can be used as a media way to accelerate and affect people's desire to buy products.

In the 21st century

McDonald's and KFC restaurants in China

Shopping mall in A Coruña, Galicia, (Spain)

Madeline Levine criticized what she saw as a large change in American culture – "a shift away from values of community, spirituality, and integrity, and toward competition, materialism and disconnection."

Businesses have realized that wealthy consumers are the most attractive targets of marketing. The upper class's tastes, lifestyles, and preferences trickle down to become the standard for all consumers. The not-so-wealthy consumers can "purchase something new that will speak of their place in the tradition of affluence". A consumer can have the instant gratification of purchasing an expensive item to improve social status.

Emulation is also a core component of 21st century consumerism. As a general trend, regular consumers seek to emulate those who are above them in the social hierarchy. The poor strive to imitate the wealthy and the wealthy imitate celebrities and other icons. The celebrity endorsement of products can be seen as evidence of the desire of modern consumers to purchase products partly or solely to emulate people of higher social status. This purchasing behavior may co-exist in the mind of a consumer with an image of oneself as being an individualist.

Cultural capital, the intangible social value of goods, is not solely generated by cultural pollution. Subcultures also manipulate the value and prevalence of certain commodities through the process of bricolage. Bricolage is the process by which mainstream products are adopted and transformed by subcultures. These items develop a function and meaning that differs from their corporate producer's intent. In many cases, commodities that have undergone bricolage often develop political meanings.

For example, Doc Martens, originally marketed as workers boots, gained popularity with the punk movement and AIDS activism groups and became symbols of an individual's place in that social group. When corporate America recognized the growing popularity of the brand, it underwent another change in cultural meaning through counter-bricolage. The widespread sale and marketing of Doc Martens brought them back into the mainstream. While corporate America reaped the ever-growing profits of the increasingly expensive boot and those modeled after its style, Doc Martens lost their original political association. Consumers used Doc Martens and related items to create an "individualized" sense of identity by appropriating statement items from subcultures they admired.

Authors Steven Quartz and Anette Asp make a similar argument that changing notions of "cool" affect consumption patterns. Items that cost less, and would normally be lower in social status according to the old rules of conspicuous consumption, can actually rise in status if they are associated with a cool, rebellious subculture. As examples, the authors cite leather jackets popularized in 1950s motorcycle movies, or the cachet of "distressed clothing", or the tech entrepreneur who chooses to wear a T-shirt and hoodie instead of an elegant suit. Quartz and Asp have labeled this trend "rebellious consumption", and assert that it has altered advertising, consumer behavior, and even has political implications since less-well-off people can feel content with their inexpensive but "cool" possessions.

In recent decades, consumerism has evolved into an organized movement to enhance the power and rights of buyers in relation to sellers. Consumer advocates believe that sellers enjoy an advantage in the traditional balance of power, for instance, the right to introduce any product in any size or style, the right to change a product's price at any time, the right to spend any amount to promote a product, and the right to use any message to encourage product purchases. Besides a buyer's principal right, i.e., not to buy, advocates have lobbied for expanded, enforceable buyer rights such as the right to be well informed about important aspects of a product, and the right to be protected against questionable products and marketing practices.

The American Dream has long been associated with consumerism. According to Sierra Club's Dave Tilford, "With less than 5 percent of world population, the U.S. uses one-third of the world's paper, a quarter of the world's oil, 23 percent of the coal, 27 percent of the aluminum, and 19 percent of the copper."

China is the world's fastest-growing consumer market. According to biologist Paul R. Ehrlich, "If everyone consumed resources at the US level, you will need another four or five Earths."

With the development of the economy, consumers' awareness of protecting their rights and interests is growing, and consumer demand is growing. Online commerce has expanded the consumer market and enhanced consumer information and market transparency. Digital fields not only bring advantages and convenience but also cause many problems and increase the opportunities for consumers to suffer damage.

Under the virtual network environment, on the one hand, consumers' privacy protection is vulnerable to infringement, driven by the development of hacker technology and the Internet, on the other hand, consumers' right to know is the basic right of consumers. When purchasing goods and receiving services, we need the real situation of institutional services. Finally, in the Internet era, consumers' demand is increasing, and we also need to protect consumers' rights and interests to improve consumers' rights and interests and promote the operation of the economic market.

Socially mediated political consumerism

See also: Consumerism and social media

Today's society has entered the era of entertainment and the Internet. Most people spend more time browsing on mobile phones than face-to-face. The convenience of social media has a subtle impact on the public and unconsciously changes people's consumption habits. The socialized Internet is gradually developing, such as Twitter, websites, news and social media, with sharing and participation as the core, consumers share product information and opinions through social media. At the same time, by understanding the reputation of the brand on social media, consumers can easily change their original attitude towards the brand. The information provided by social media helps consumers shorten the time of thinking about products and decision-making, so as to improve consumers' initiative in purchase decision-making and improve consumers' shopping and decision-making quality to a certain extent.

Criticism

Main articles: Anti-consumerism and Affluenza

Buy Nothing Day demonstration in San Francisco, November 2000

Shop Until You Drop by Banksy, in London

Andreas Eisingerich discusses in his article "Vision statement: Behold the extreme consumers...and learn to embrace them" that "In many critical contexts, consumerism is used to describe the tendency of people to identify strongly with products or services they consume, especially those with commercial brand-names and perceived status-symbolism appeal, e.g. a luxury car, designer clothing, or expensive jewelry". A major criticism of consumerism is that it serves the interests of capitalism.

Consumerism can take extreme forms, to the extent that consumers will sacrifice significant time and income not only to make purchases, but also to actively support a certain firm or brand. As stated by Gary Cross in his book An All-Consuming Century: Why Commercialism Won in Modern America, "consumerism succeeded where other ideologies failed because it concretely expressed the cardinal political ideals of the century – liberty and democracy – and with relatively little self-destructive behavior or personal humiliation." He discusses how consumerism won in its forms of expression.

Tim Kasser, in his book The High Price of Materialism, examines how the culture of consumerism and materialism affects our happiness and well-being. The book argues that people who value wealth and possessions more than other things tend to have lower levels of satisfaction, self-esteem, and intimacy, and higher levels of anxiety, depression, and insecurity. The book also explores how materialistic values harm our relationships, our communities, and our environment, and suggests ways to reduce materialism and increase our quality of life.

Opponents of consumerism argue that many luxuries and unnecessary consumer-products may act as a social mechanism allowing people to identify like-minded individuals through the display of similar products, again utilizing aspects of status-symbolism to judge socioeconomic status and social stratification. Some people believe relationships with a product or brand name are substitutes for healthy human relationships lacking in societies, and along with consumerism, create a cultural hegemony, and are part of a general process of social control in modern society.

In 1955, economist Victor Lebow stated:

Our enormously productive economy demands that we make consumption our way of life, that we convert the buying and use of goods into rituals, that we seek our spiritual satisfaction and our ego satisfaction in consumption. We need things consumed, burned up, worn out, replaced and discarded at an ever-increasing rate.

Figures who arguably do not wholly buy into consumerism include German historian Oswald Spengler (1880–1936), who said: "Life in America is exclusively economic in structure and lacks depth", and French writer Georges Duhamel (1884–1966), who held American materialism up as "a beacon of mediocrity that threatened to eclipse French civilization". Francis Fukuyama blames consumerism for moral compromises.

Moreover, some critics have expressed concern about the role commodities play in the definition of one's self. In his 1976 book Captains of Consciousness: Advertising and the Social Roots of the Consumer Culture, historian and media theorist Stuart Ewen introduced what he referred to as the "commodification of consciousness", and coined the term "commodity self" to describe an identity built by the goods we consume.

For example, people often identify as PC or Mac users, or define themselves as a Coke drinker rather than a Pepsi drinker. The ability to choose one product out of a great number of others allows a person to build a sense of "unique" individuality, despite the prevalence of Mac users or the nearly identical tastes of Coke and Pepsi. By owning a product from a certain brand, one's ownership becomes a vehicle of presenting an identity that is associated with the attitude of the brand. The idea of individual choice is exploited by corporations that claim to sell "uniqueness" and the building blocks of an identity. The invention of the commodity self is a driving force of consumerist societies, preying upon the deep human need to build a sense of self.

Environmental impact

Critics of consumerism point out that consumerist societies are more prone to damage the environment, contribute to global warming and use resources at a higher rate than other societies. Jorge Majfud says that "Trying to reduce environmental pollution without reducing consumerism is like combatting drug trafficking without reducing the drug addiction."

Pope Francis also critiqued consumerism in his encyclical Laudato Si': On Care For Our Common Home. He critiqued the harm consumerism does to the environment and states, "The analysis of environmental problems cannot be separated from the analysis of human, family, work-related and urban contexts, nor from how individuals relate to themselves, which leads in turn to how they relate to others and to the environment." Pope Francis believed the obsession with consumerism leads individuals further away from their humanity and obscures the interrelated nature between humans and the environment.

Another critic is James Gustave Speth. He argues that the growth imperative represents the main goal of capitalistic consumerism. In his book The Bridge at the Edge of the World he notes, "Basically, the economic system does not work when it comes to protecting environmental resources, and the political system does not work when it comes to correcting the economic system".

In an opinion segment of New Scientist magazine published in August 2009, reporter Andy Coghlan cited William Rees of the University of British Columbia and epidemiologist Warren Hern of the University of Colorado at Boulder saying that human beings, despite considering themselves civilized thinkers, are "subconsciously still driven by an impulse for survival, domination and expansion ... an impulse which now finds expression in the idea that inexorable economic growth is the answer to everything, and, given time, will redress all the world's existing inequalities."

According to figures presented by Rees at the annual meeting of the Ecological Society of America, human society is in a "global overshoot", consuming 30% more material than is sustainable from the world's resources. Rees went on to state that at present, 85 countries are exceeding their domestic "bio-capacities", and compensate for their lack of local material by depleting the stocks of other countries, which have a material surplus due to their lower consumption. Not only that, but McCraken indicates that how consumer goods and services are bought, created and used should be taken under consideration when studying consumption.

Not all anti-consumerists oppose consumption in itself, but they argue against increasing the consumption of resources beyond what is environmentally sustainable. Jonathan Porritt writes that consumers are often unaware of the negative environmental impacts of producing many modern goods and services, and that the extensive advertising industry only serves to reinforce increasing consumption.

Conservation scientists Lian Pin Koh and Tien Ming Lee, discuss that in the 21st century, the damage to forests and biodiversity cannot be dealt with only by the shift towards "Green" initiatives such as "sustainable production, green consumerism, and improved production practices". They argue that consumption in developing and emerging countries needs to be less excessive. Likewise, other ecological economists such as Herman Daly and Tim Jackson recognize the inherent conflict between consumer-driven consumption and planet-wide ecological degradation.

American environmental historian and sociologist Jason W. Moore, in his book Anthropocene or Capitalocene? Nature, History, and the Crisis of Capitalism points out that the challenge of addressing both underconsumption and overconsumption of resources lies at the heart of the world's primary sustainability dilemma. While significant portions of the global population struggle to meet basic needs, the resource-intensive lifestyles of affluent societies — characterized by car dependency, frequent air travel, high meat consumption, and an apparently limitless appetite for consumer goods like clothing and technological devices — are key drivers of the unsustainable practices.

Consumerism as cultural ideology

In the 21st century's globalized economy, consumerism has become a noticeable part of the culture. Critics of this phenomenon have not only raised concerns about its environmental sustainability, but also its cultural implications. However, a number of scholars have explored the relationship between environmentalism and consumerism within the context of a market economy society.

Discussions of the environmental implications of consumerist ideologies in works by economists James Gustave Speth and Naomi Klein, and consumer cultural historian Gary Cross. Leslie Sklair proposes the criticism through the idea of culture-ideology of consumerism in his works. He says that,

First, capitalism entered a qualitatively new globalizing phase in the 1950s. As the electronic revolution got underway, significant changes began to occur in the productivity of capitalist factories, systems of extraction, processing of raw materials, product design, marketing and distribution of goods and services. [...] Second, the technical and social relations that structured the mass media all over the world made it very easy for new consumerist lifestyles to become the dominant motif for these media, which became in time extraordinarily efficient vehicles for the broadcasting of the culture-ideology of consumerism globally.

Today, people are universally and continuously being exposed to mass consumerism and product placement in the media or even in their daily lives. The line between information, entertainment, and promotion of products has been blurred, thus explaining how people have become more reformulated into consumerist behaviours. Shopping centers are a representative example of a place where people are explicitly exposed to an environment that welcomes and encourages consumption.

For example, in 1993, Goss wrote that the shopping center designers "strive to present an alternative rationale for the shopping center's existence, manipulate shoppers' behavior through the configuration of space, and consciously design a symbolic landscape that provokes associative moods and dispositions in the shopper". On the prevalence of consumerism in daily life, historian Gary Cross says that "The endless variation of clothing, travel, and entertainment provided opportunity for practically everyone to find a personal niche, no matter their race, age, gender or class."

Arguably, the success of the consumerist cultural ideology can be witnessed all around the world. People who rush to the mall to buy products and end up spending money with their credit cards can easily become entrenched in the financial system of capitalist globalization.

Alternatives

See also: Ecoleasing, Ethical consumerism, Frugality, and Green consumption

Since consumerism began, various individuals and groups have consciously sought an alternative lifestyle. These movements range on a spectrum from moderate "simple living", "eco-conscious shopping", and "localvore"/"buying local", to Freeganism on the extreme end. Building on these movements, the discipline of ecological economics addresses the macro-economic, social and ecological implications of a primarily consumer-driven economy.

Consumer choice

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Consumer_choice 

The theory of consumer choice is the branch of microeconomics that relates preferences to consumption expenditures and to consumer demand curves. It analyzes how consumers maximize the desirability of their consumption (as measured by their preferences subject to limitations on their expenditures), by maximizing utility subject to a consumer budget constraint. Factors influencing consumers' evaluation of the utility of goods include: income level, cultural factors, product information and physio-psychological factors.

Consumption is separated from production, logically, because two different economic agents are involved. In the first case, consumption is determined by the individual. Their specific tastes or preferences determine the amount of utility they derive from goods and services they consume. In the second case, a producer has different motives to the consumer in that they are focussed on the profit they make. This is explained further by producer theory. The models that make up consumer theory are used to represent prospectively observable demand patterns for an individual buyer on the hypothesis of constrained optimization. Prominent variables used to explain the rate at which the good is purchased (demanded) are the price per unit of that good, prices of related goods, and wealth of the consumer.

The law of demand states that the rate of consumption falls as the price of the good rises, even when the consumer is monetarily compensated for the effect of the higher price; this is called the substitution effect. As the price of a good rises, consumers will substitute away from that good, choosing more of other alternatives. If no compensation for the price rise occurs, as is usual, then the decline in overall purchasing power due to the price rise leads, for most goods, to a further decline in the quantity demanded; this is called the income effect. As the wealth of the individual rises, demand for most products increases, shifting the demand curve higher at all possible prices.

In addition, people's judgments and decisions are often influenced by systemic biases or heuristics and are strongly dependent on the context in which the decisions are made, small or even unexpected changes in the decision-making environment can greatly affect their decisions.

The basic problem of consumer theory takes the following inputs:

• The consumption set C – the set of all bundles that the consumer could conceivably consume.
• A preference relation over the bundles of C. This preference relation can be described as an ordinal utility function, describing the utility that the consumer derives from each bundle.
• A price system, which is a function assigning a price to each bundle.
• An initial endowment, which is a bundle from C that the consumer initially holds. The consumer can sell all or some of his initial bundle in the given prices, and can buy another bundle in the given prices. He has to decide which bundle to buy, under the given prices and budget, in order to maximize their utility.

Behavioral economics

Behavioral economics has criticized neoclassical consumer choice theory because reality is more complex that what the theory can determine itself.

Firstly, consumers use heuristics, which means they do not scrutinize decisions too closely but rather make broad generalizations. Further, it is deemed not worthwhile to attempt to determine the value of specific behavior. Heuristics are techniques for simplifying the decision-making process by omitting or disregarding certain information and focusing exclusively on particular elements of alternatives. While some heuristics must be utilized purposefully and deliberately, others can be used relatively effortlessly, even without our conscious awareness. Consumption by individuals is typically impacted by advertising and consumer habits as well.

Secondly, consumers struggle to give standard utils and instead rank distinct options in order of preference, which is referred to as ordinal utility.

Thirdly, it is not always likely that a consumer would stay rational and make the choice which maximizes their utility. Sometimes, individuals are irrational. For example, a consumer making impulsive purchases is not a rational choice. The rise of the internet and social networks may cause changes in consumer behavior, resulting in more planned and sensible purchase processes.

Fourthly, individuals can be reluctant to spend cash on particular items because they have preconceived boundaries on how much they can afford to spend on 'luxuries,' according to their mental accounting.

Lastly, it is not easy to separate products in the market. Some items, such as an electronic car or a refrigerator, are only purchased occasionally and cannot be mathematically divided.

Example: homogeneous divisible goods

Consider an economy with two types of homogeneous divisible goods, traditionally called X and Y.

• The consumption set is ${\displaystyle R_{+}^2}$, i.e. the set of all pairs ${\displaystyle (x,y)}$ where ${\displaystyle x\ge 0}$ and ${\displaystyle y\ge 0}$. Each bundle contains a non-negative quantity of good X and a non-negative quantity of good Y.
• A typical preference relation can be represented by a set of indifference curves. Each curve represents a set of bundles that give the consumer the same utility. A typical utility function is the Cobb–Douglas function: ${\displaystyle u(x,y)=x^{\alpha }\cdot y^{\beta }}$, which is shown in the figure below.
• A typical price system assigns a price to each type of good, such that the cost of bundle ${\displaystyle (x,y)}$ is ${\displaystyle x{p}_X+y{p}_Y}$.
• A typical initial endowment for an individual is fixed income, which along with transparent prices of goods implies a budget constraint. The consumer can choose any point on or below the budget constraint line ${\displaystyle BC}$ In the diagram. This line is downward sloped and linear since it represents the boundary of the inequality ${\displaystyle x{p}_X+y{p}_Y\le \mathrm{i}\mathrm{n}\mathrm{c}\mathrm{o}\mathrm{m}\mathrm{e}}$. In other words, the amount spent on both goods together is less than or equal to the income of the consumer.

The consumer will choose the indifference curve with the highest utility that is attainable within their budget constraint. Every point on indifference curve I3 is outside the budget constraint. As a result, the most optimal point for the individual is where the indifference curve I2 is tangent to the budget constraint. As a result, the individual will purchase ${\displaystyle X\ast }$ of good X and ${\displaystyle Y\ast }$ of good Y.

Indifference curve analysis begins with the utility function. The utility function is treated as an index of utility. All that is necessary is that the utility index change as more preferred bundles are consumed.

The tangent point between the indifference curve and the budget line is the point at which consumer satisfaction is maximized.

Indifference curves are typically numbered with the number increasing as more preferred bundles are consumed. The numbers have no cardinal significance; for example, if three indifference curves are labeled 1, 4, and 16 respectively that means nothing more than the bundles "on" indifference curve 4 are more preferred than the bundles "on" indifference curve 1.

The income effect and price effect explain how the change in price of a good changes the consumption of the good. The theory of consumer choice examines the trade-offs and decisions people make in their role as consumers as prices and their income change.

Characteristics of the indifference curve

Indifference curves are heuristic devices used in microeconomics to convey preferences of a consumer graphically along with the limitations of a consumer's budget.

An indifference curve shows the various combination of two goods that leave the consumer equally satisfied. For example, every point on the indifference curve I1 (as shown in the figure above), which represents a unique combination of good X and good Y, will give the consumer the same utility.

Indifference curves have a few assumptions that explain their nature.

Firstly, indifference curves are typically convex to the origin of the graph. This is because it is assumed that a given consumer will sacrifice consumption in one good for more consumption of the other good. Thus, the marginal rate of substitution (MRS), which is the slope of the indifference curve at any single point along the curve, will decrease when moving down a given indifference curve. Indifference curves can also take various other shapes depending on the preferences of the consumer.

Secondly, for a given consumer, their indifference curves cannot intersect each other. This is because the same set of consumption for a given individual cannot represent two different utility values.

Thirdly, it is assumed that individuals are more satisfied with a bundle of goods on an indifference curve that is further away from the origin. From the graph above, the indifference curve I3 would give the consumer the highest utility whereas I1 would give the lowest utility.

The indifference curves shown in the figure above adhere to the three assumptions outlined in that they are convex, do not intersect, and have a higher utility the further the indifference curve is away from the origin.

Example: land

As a second example, consider an economy that consists of a large land-estate L.

• The consumption set is ${\displaystyle P(L)}$, i.e. the set of all subsets of L (all land parcels).
• A typical preference relation can be represented by a utility function which assigns, to each land parcel, its total "fertility" (the total amount of grain that can be grown in that land).
• A typical price system assigns a price to each land parcel, based on its area.
• A typical initial endowment is either a fixed income, or an initial parcel which the consumer can sell and buy another parcel.

Sunk cost effect

According to the laws of economic logic, sunk costs and making decisions should be irrelevant. However, there is a widespread irrationality in people's actual investment activities, production and daily activities that takes sunk costs into account when making decisions.

Sunk costs for individuals may be represented by behaviour in which they make decisions based on the fact that they have paid for this good or service irrespective of current circumstances. An example of this is a consumer who has already purchased their ticket for a concert and may travel through a storm to be able to attend the concert in order to not waste their ticket.

Another example is different payment schedules for gym members may result in different levels of potential sunk costs and affect the frequency of gym visits by consumers. That is to say, the payment schedule with other less frequent (e.g., quarterly, semi-annual or annual payment schedule), compared to a month pay the fee to the gym in a larger, these factors to reduce the cost and reduce the psychological sunk costs, more vivid sunk costs significantly increased people's gym visits. In summary, the behaviour of consumers in these two examples can be characterised by their ideal that losses loom larger than gains.

Role of time constraint effect

Highly relevant to the study and understanding of consumer choice is the role of time contraint effects. This effect is related to the available time consumers have before making their decision on whether to buy a product or service and which product or service to buy. With the incessant exposure consumers have to businesses through the avenues of social media, television, billboards and radio, time constraint effects can significantly impact the decision-making process of these consumers.

Examples of Screen Shots for Set Sizes 4, 9 and 16

A study was conducted to measure the computational processes of subjects when faced with a decision to choose a product from a bundle of slightly differentiated products, whilst faced with a time constraint. The study was conducted through an experiment in which participants were in a supermarket-like environment and were asked to pick a snack food item from a screenshot out of a set of either 4, 9 or 16 similar items with a 3-second time window.

The results show that consumers are typically good at optimizing items that they have seen within the search process, i.e., they can easily make a choice from the "seen-set" of items. The results also show that consumers mostly use the hybrid model as a computational process for consumer choice. The data is most qualitatively consistent with the hybrid model rather than the optimal or satisfying models.

This reliance on impulsive data however isn't necessarily representative of today's market, throughout the pandemic consumers where largely forced to use online shopping methods making browsing between competitors easier, allowing for indulgence in research and conversations outside of the retailers control and evaluation of the need for a product to be completed at the individuals pace. This indicates that the time constraint effect may be less controlling of consumers choice than initially discussed.

However, important consideration should be made based temporal effects of a purchase. A study found that consumers often fall into a prevention-promotion mindset depending on the urgency of a decision. A prevention mindset comes from the need for your goals to align with your responsibilities. A promotion mindset revolves around the experience of new things. When faced with a purchase consumers were found to adopt the prevention mindset however when the purchase was distant a promotion mindset was adopted.

In conclusion the role of the time constraint effect on consumer choice is highly relevant when informing consumer choices. With the ability to extend the time constraint by using remote shopping consumers can often make a more informed decision however when the time for purchase arrives consumers often fall into a prevention focus mindset.

Effect of online reviews

During the online shopping process, retailers encourage customers to share their product reviews on digital platforms such as e-commerce websites and social media, which in turn helps other shoppers to have a better understanding of the product. Online consumer reviews play a crucial role in providing product information before consumers make a purchase decision. These reviews, full of desires, preferences and behavioural insights, are a valuable source of data for both consumers and businesses. By understanding consumer behaviour and preferences, businesses can develop strategic plans to improve the quality of their services and tailor their offerings to better meet the needs of their customers.

For example, when consumers do an online search for hotels, they can compare prices, locations, services and other aspects of various potential hotels on the site. The platform can also provide personalised recommendations based on a user's search history and preferences. Based on the attributes listed for each hotel, consumers can make an informed decision that is influenced by the consistency between their perceived hotel performance and their preferences – a classic multi-attribute decision making (MADM) problem. Vocabulary-based sentiment analysis is incorporated into online reviews to create product rankings that take into account the sentiment score of the review, the brand ranking of the product and the usefulness of the review.

In the context of travel, travellers' choices and behaviours when selecting restaurants are heavily influenced by their travel classification or purpose, such as leisure, business or adventure. The study's modelling results suggest that travellers show diverse preferences in terms of dining behaviour, depending on factors such as environment, type of cuisine, price range and dietary restrictions. While the study provides valuable insights into restaurant decision-making, it also acknowledges limitations and suggests other directions for research to further explore consumer preferences in various contexts.

However, the sheer volume of online reviews and the need to consider various attributes when making decisions can be overwhelming for consumers. In many cases, it can be a challenge to discern genuine reviews from fake ones or marketing-driven content. Therefore, tools and methods must be developed to help consumers make informed choices by helping them rank product candidates based on other consumers' reviews and their preferences. The use of artificial intelligence and machine learning algorithms has the potential to help sift through large amounts of data, extract useful insights and provide personalised recommendations to consumers.

In short, online consumer reviews are an important resource for shoppers and businesses alike. Using this information can help businesses better understand consumer preferences, improve their offerings and ultimately increase customer satisfaction. For consumers, having access to aggregated, relevant and trustworthy information can greatly enhance their decision-making process and overall online shopping experience.

Effect of a price change

The indifference curves and budget constraint can be used to predict the effect of changes to the budget constraint. The graph below shows the effect of a price increase for good Y. If the price of Y increases, the budget constraint will pivot from ${\displaystyle BC2}$ to ${\displaystyle BC1}$. Notice that because the price of X does not change, the consumer can still buy the same amount of X if he or she chooses to buy only good X. On the other hand, if the consumer chooses to buy only good Y, he or she will be able to buy less of good Y because its price has increased.

Now, the consumption of good X and Y will be re-allocated to account for the price change in good Y. To maximize their utility, the consumption bundle that is on the highest indifference curve that is tangent to ${\displaystyle BC1}$. This consumption bundle is now (X1, Y1) as shown in the figure below. As a result, the amount of good Y bought has shifted from Y2 to Y1, and the amount of good X bought has shifted from X2 to X1. The opposite effect will occur if the price of Y decreases causing the budget constrain to shift from ${\displaystyle BC2}$ to ${\displaystyle BC3}$, and the highest indifference curve that maximises the consumers utility shifts from I2 to I3.

If these curves are plotted for many different prices of good Y, a demand curve for good Y can be constructed. The diagram below shows the demand curve for good Y as its price varies. Alternatively, if the price for good Y is fixed and the price for good X is varied, a demand curve for good X can be constructed.

Income effect

The income effect is the phenomenon observed through changes in purchasing power. It reveals the change in quantity demanded brought by a change in real income. Graphically, as long as the prices remain constant, changing income will create a parallel shift of the budget constraint. Increasing income will shift the budget constraint right since more of both goods can be bought by the consumer. On the other hand, a decrease in income will shift the budget constraint to the left.

Depending on the indifference curves, as income increases, the quantity purchased of a good can either increase, decrease or stay the same. In the figure below, good Y is a normal good since the amount purchased increased as the budget constraint shifted from BC1 to the higher income budget constraint, BC2. However, good X is an inferior good since the quantity purchased by the consumer decreased as their income increased.

${\displaystyle \mathrm{\Delta }{y}_1^n}$ is the change in the demand for good 1 when we change income from ${\displaystyle m^{\prime }}$ to ${\displaystyle m}$, holding the price of good 1 fixed at ${\displaystyle p_1^{\prime }}$:

${\displaystyle \mathrm{\Delta }{y}_1^n=y_1(p_1^{\prime },m)-y_1(p_1^{\prime },m^{\prime }).}$

The equilibrium points at various levels of consumer's income builds the income consumption curve. This curve traces out the income consumption curve traces out the income effect on the quantity consumed of the goods.

Price effect as the sum of substitution and income effects

Further information: Slutsky equation and Hicksian demand

Every price change can be decomposed into an income effect and a substitution effect; the price effect is the sum of substitution and income effects.

The substitution effect is the change in demands resulting from a price change that alters the slope of the budget constraint but leaves the consumer on the same indifference curve. In other words, it illustrates the consumer's new consumption basket after the price change while being compensated as to allow the consumer to be as satisfied as he or she was previously. By this effect, the consumer is posited to substitute toward the good that becomes comparatively less expensive. In the illustration below this corresponds to an imaginary budget constraint denoted SC being tangent to the indifference curve I1. Then the income effect from the rise in purchasing power from a price fall reinforces the substitution effect. If the good is an inferior good, then the income effect will offset in some degree the substitution effect. If the income effect for an inferior good is sufficiently strong, the consumer will buy less of the good when it becomes less expensive. This is also known as a Giffen good (commonly believed to be a rarity).

The substitution effect, ${\displaystyle \mathrm{\Delta }{y}_1^s}$, is the change in the amount demanded for ${\displaystyle Y}$ when the price of good ${\displaystyle Y}$ falls from ${\displaystyle p_1}$ to ${\displaystyle p_1^{\prime }}$ (represented by the budget constraint shifting from ${\displaystyle BC1}$ to ${\displaystyle BC2}$ and thus increasing purchasing power) and, at the same time, the money income falls from ${\displaystyle m}$ to ${\displaystyle m^{\prime }}$ to keep the consumer at the same level of utility on I1:

${\displaystyle \mathrm{\Delta }{y}_1^s=y_1(p_1^{\prime },m^{\prime })-y_1(p_1,m)=Y_s-Y_1.}$

The substitution effect increases the amount demanded of good ${\displaystyle Y}$ from ${\displaystyle Y_1}$ to ${\displaystyle Y_s}$ in the diagram. In the example shown, the income effect of the fall in ${\displaystyle p_1}$ partly offsets the substitution effect as the amount demanded of ${\displaystyle Y}$ in the absence of an offsetting income change ends up at ${\displaystyle Y_2}$ thus the income effect from the rise in purchasing power due to the price drop is that the quantity demanded of ${\displaystyle Y}$ goes from ${\displaystyle Y_s}$ to ${\displaystyle Y_2}$. The total effect of the price drop of good Y on the quantity demanded is the sum of the substitution effect and the income effect.

Indifference curves for goods that are perfect substitutes or complements

Goods X and Y are perfect substitutes.

Perfect substitutes

A perfect substitute is a good or service which can be used in exactly the same way as the good or service it replaces. Products which are perfect substitutes for one another will exhibit straight lines on the indifference curve (as shown in the figure to the right). This demonstrates that the relative utility of one good is equivalent to the relative utility of the other, regardless of their quantity. An example of perfect substitutes could be Coca-Cola compared to Pepsi Max. A consumer who considers these products as perfect substitutes will be indifferent to spending all of their budget on strictly one or the other.

Left and Right Shoes are perfect complements.

Perfect complements

A perfect complement is a good or service whose appeal increases with the popularity of its complement. The relationship between both goods X and Y are naturally dependent on each other along with the concept of consumption being dependent upon other consumption. Products that are perfect complements will be demonstrated graphically on an indifference curve with two lines at perfect right angles to one another (as shown in the figure to the right). This demonstrates that the demand and consumption of one good is inherently tied to the other. In other words, when the consumption of one good increases, as does the consumption of the complementary good. An example of complementary goods is shown in the figure to the right. Left shoes and right shoes can be considered perfect complements as the ratio between sales of left and right shoes will never shift noticeably from 1:1.

Utility

The usefulness of a good is a key factor when discussing consumer decision making. When a product both meets the needs of a consumer and has value it has utility. Utility can be quantified through a set of numerical values that reflect the relative rankings of various bundles of goods measured by consumers preference in their consumption.

Utility function measures the preferences consumers apply to their consumption of goods and services. One of the most well known utility functions is the Cobb–Douglas utility function.

Marginal utility

Marginal utility differs from utility as it refers to the additional benefit derived from consuming one more unit of a specific good or service. Marginal utility result can be positive, neutral or negative depending on the outcomes for the consumer. Utility is not constant, and for every additional unit consumed, often the consumer experiences what economists refer to as the diminishing marginal utility or diminishing returns, where each additional unit adds less and less marginal utility.

It can be represented by the formula below:

MU_Z = △U/△Z

where MU_Z represents the marginal utility of good Z; △U and △Z represent changes in utility and consumption of good Z respectively.

Assumptions

The behavioral assumption of the consumer theory proposed herein is that all consumers seek to maximize utility. Traditionally in economics, this activity of maximizing utility has been deemed as the "rational" behavior of decision makers. More specifically, in the eyes of economists, all consumers seek to maximize their utility function subject to a budgetary constraint. In other words, economists assume that consumers will always choose the "best" bundle of goods they can afford. Consumer theory is therefore based on generating refutable hypotheses about the nature of consumer demand from this behavioral postulate.

In order to reason from the central postulate towards a useful model of consumer choice, it is necessary to make additional assumptions about the certain preferences that consumers employ when selecting their preferred "bundle" of goods. These are relatively strict, allowing for the model to generate more useful hypotheses with regard to consumer behavior than weaker assumptions, which would allow any empirical data to be explained in terms of stupidity, ignorance, or some other factor, and hence would not be able to generate any predictions about future demand at all. For the most part, however, they represent statements which would only be contradicted if a consumer was acting in (what was widely regarded as) a strange manner. In this vein, the modern form of consumer choice theory assumes:

Consumer choice theory is based on the assumption that the consumer fully understands their own preferences, allowing for a simple but accurate comparison between any two bundles of good presented.^[23] That is to say, it is assumed that if a consumer is presented with two consumption bundles A and B each containing different combinations of n goods, the consumer can unambiguously decide if (s)he prefers A to B, B to A, or is indifferent to both. The few scenarios where it is possible to imagine that decision-making would be very difficult are thus placed "outside the domain of economic analysis". However, discoveries in behavioral economics has found that actual decision making is affected by various factors, such as whether choices are presented together or separately through the distinction bias.

Preferences are complete

When a consumer is faced with a choice between two goods A and B, they must rank them so that only one of the followings is true: the consumer prefers the good A to good B, the consumer prefers good B to good A, or the consumer is indifferent between the goods.

Either A ≥ B or B ≥ A (or both) for all (A,B).

Preference are transitive

This assumption dictates that if good A is preferred to good B and good B is preferred to good C then good A must be preferred to good C. This also means that if the consumer is indifferent between goods A and B and is indifferent between goods B and C she will be indifferent between goods A and C. This is the consistency assumption. This assumption eliminates the possibility of intersecting indifference curves.

If A ≥ B and B ≥ C, then A ≥ B (for all A, B, C).

Preferences are reflexive

Relationships are reflexive if they can be applied when both sides of the relationship are the same. Weak preference relationships are reflexive. A bundle of goods can be said to be weakly preferred to itself, but not strictly preferred to itself. As such, a consumer would say that they consider good A to be at least as good as good B. Alternatively, the axiom can be modified to read that the consumer is indifferent with regard to A and B.

Preferences exhibit non-satiation

The assumption of non-satiated preferences means that more is better – all else being the same, more of a commodity is better than less of it. This is the "more is always better" assumption; that in general if a consumer is offered two almost identical bundles A and B, but where B includes more of one particular good, the consumer will choose bundle B. In other words, this theory assumes that a consumer will never be completely satisfied, as they will always be happier consuming a little bit more. Among other things this assumption precludes circular indifference curves. Non-satiation in this sense is not a necessary but a convenient assumption. It avoids unnecessary complications in the mathematical models.

Indifference curves exhibit diminishing marginal rates of substitution

This assumption assures that indifference curves are smooth and convex to the origin and is implicit in the last assumption.

This assumption also set the stage for using techniques of constrained optimization. This is because the shape of the indifference curve assures that the first derivative is negative and the second is positive.

This assumption incorporates the theory of diminishing marginal utility. This theory of diminishing marginal utility states that the added satisfaction experienced by a consumer from having one additional unit of a good or service will diminish. In other words, the marginal utility of each additional unit will decline. An example of this can be illustrated by a consumer who orders several coffees throughout the course of a day. The marginal utility experienced by the first coffee will be greater than the second. The marginal utility experienced by the second coffee will be greater than the third, and so on.

Goods are available in all quantities

It is assumed that a consumer may choose to purchase any quantity of a goods they desire, for example, 2.6 eggs and 4.23 loaves of bread. Whilst this makes the model less precise, it is generally acknowledged to provide a useful simplification to the calculations involved in consumer choice theory, especially since consumer demand is often examined over a considerable period of time.

Note the assumptions do not guarantee that the demand curve will be negatively sloped. A positively sloped curve is not inconsistent with the assumptions.

Use value

In Marx's critique of the political economy, any labor-product has a value and a use value, and if it is traded as a commodity in markets, it additionally has an exchange value, most often expressed as a money-price. Marx acknowledges that commodities being traded also have a general utility, implied by the fact that people want them, but he argues that this by itself tells us nothing about the specific character of the economy in which they are produced and sold.

Labor-leisure trade-off

Main article: Backward bending supply curve of labour

Consumer theory is also relevant when considering the trade-off between labour and leisure, allowing us to examine the choices made based on consumers preferences and constraints. In this analysis, labour and leisure are both considered goods. Since a consumer has a finite amount of time, they must make a choice between leisure (which earns no income for consumption) and labor (which does earn income for consumption). Using this method the opportunity cost of their decisions can dictate consumers actions.

The previous model of consumer choice theory is applicable with only slight modifications. Primarily, the total amount of time that an individual has to allocate is known as their "time endowment", and is often denoted as T. Next, the amount an individual allocates to labor (L) and leisure (ℓ) is constrained by T such that:

${\displaystyle \ell +L=T}$

Consumption (C), which represents the amount of goods or services a person can take, is determined as the amount of labor they choose multiplied by the amount they are paid per hour of labor (their wage, often denoted w). Thus, the amount that a person consumes is:

${\displaystyle C=w(T-\ell )}$

Such that, when a consumer chooses no leisure ${\displaystyle (\ell =0)}$ then ${\displaystyle T-\ell =T}$ and ${\displaystyle C=wT}$.

From this labor-leisure tradeoff model, both the substitution effect and the income effect can be used to analyse various changes caused by welfare benefits, labor taxation, or tax credits.

It is important to note that the labour-leisure tradeoff will also be impacted on consumers norms, preferences and other non-economical factors. Therefore, real world applications of this relationship should be supported by an understanding of the factors previously listed to ensure oversights for consumer behaviour are avoided.