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Frenzel Baudisch, Alexander
Year of Publication: 
Series/Report no.: 
Papers on Economics and Evolution 0604
Boundedly rational consumers rely on their social environment as a source of information. Drawing upon psychological theories about social comparison processes, we hypothesize that social reference groups underlie market segments. New reference groups can emerge from social comparison processes, leading to the establishment of new submarkets and the evolution of aggregate consumer heterogeneity. These propositions are tested with series of cross-sectional surveys on footwear consumption of German men between 1980 and 1991. Using latent class models, we describe the emergence of the submarket for athletic shoes as a function of the appearance and establishment of a new social consumer group.
Consumer Behavior
Consumer Heterogeneity
Submarket Emergence
Social Comparison Theory
Segmentation Analysis
Document Type: 
Working Paper

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