Consumer Inertia: A Missing Link?
Abstract
A bstract This note seeks to explore one of the factors affecting a consumer who is faced with a price increase. We are also interested in the consumer as a supplier of labor services who is faced with an increase in offered wages. In both cases we postulate a less than instantaneous response to market change, which phenomenon we term an inertial interval. Note is taken of previous work by Armen A. Alchian relating time and elasticity. The present emphasis on consumer inertia is said not to be inconsistent with Alchian's view. The factors affecting consumer (and producer) inertia are referred to in general terms as habit and sensitivity to peer pressure, thus opening the discussion to psychosocial investigation of the behavior in question.
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Cognitive inertia denotes conscious sticking to the status quo despite being aware it might not be the best option, while affective inertia characterizes sticking to the status quo because other options are observed as difficult to acquire.
“The cognitive inertia denotes as conscious sticking to the status quo, despite being aware of that it might not be the best option to choose, while affective inertia characterizes as sticking to the status quo because other options are observed as being difficult to acquire (Greenfield 2005; Handel 2013).”
From Health insurance policy renewal: an exploration of reputation, performance, and affect to understand customer inertia (2022) · cites this paper as Greenfield 2005
Inertia can be divided into cognitive inertia and affective inertia.
“Moreover, inertia can be divided into two distinct measures: first, cognitive inertia and second, affective inertia (Greenfield 2005; Polites and Karahanna 2012).”
From Health insurance policy renewal: an exploration of reputation, performance, and affect to understand customer inertia (2022) · cites this paper as Greenfield 2005
Cites
INFORMATION COSTS, PRICING, AND RESOURCE UNEMPLOYMENT
Alchian, A. A. (1969) · Economic Inquiry · doi:10.1111/j.1465-7295.1969.tb01469.x · Cited by 286 · see citing works
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Polites, G. L., & Karahanna, E. (2012) · MIS Quarterly · doi:10.2307/41410404 · Cited by 679 · see citing works
Kautish, P., Khare, A., & Sharma, R. (2022) · Journal of Marketing Analytics · doi:10.1057/s41270-021-00134-7 · Cited by 25 · see citing works
- Authors
- Greenfield, H. I.
- Affiliations
- Queens College, CUNY (US)
- Corresponding author
- Greenfield, Harry I.
- Venue
- The American Journal of Economics and Sociology
- Publisher
- Wiley
- Published
- 2005-10
- Volume
- 64
- Issue
- 4
- Pages
- 1085-1089
- ISSN
- 0002-9246 (ISSN-L)
- 1536-7150
- OpenAlex
- W1980135321
- Cited by
- 24
- References
- 1
- Citations by year
- 2023: 3 · 2022: 2 · 2021: 4 · 2020: 3 · 2019: 1 · 2018: 3 · 2017: 3 · 2016: 1 · 2013: 2 · 2012: 1
- FWCI
- 0.00
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- American Journal of Economics and Sociology (publishedVersion)
- Topics
- Social Sciences › Business, Management and Accounting › Marketing › Consumer Market Behavior and Pricing
- Social Sciences › Decision Sciences › General Decision Sciences › Decision-Making and Behavioral Economics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic Theory and Institutions
- Keywords
- consumer inertia, price increases, wage growth, labor supply, habit, peer pressure, consumer behavior
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