Consumer Inertia: A Missing Link?

摘要

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.