Demand dynamics with socially evolving preferences

In this work we, first, identify a few stylized facts concerningmicroconsumption acts. Second, building on them, we developa simple model of 'boundedly rational' consumers who endogenouslyevolve their preferences via both innovation and social imitation.Third, we explore some statistical properties of the demandpatterns generated by the model which, despite its simplicity,are surprisingly in line with the empirical evidence. Theseresults, we suggest, bring encouraging support to microfoundationsof demand theory based on cognitive and behavioral foundationsmore in tune with the psychological and sociological evidence,based on heterogeneous agents who are much less 'rational' andmuch more social than in standard theory, and who collectivelydiscover 'along the way' what they like within a growing universeof available commodities.