Verstegen, Bernard Hendrikus Jozef

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Proceedings - University of Groningen

   University of GroningenThe functioning of hard cores in microeconomic theories of consumer behaviorVerstegen, Bernard Hendrikus JozefIMPORTANT NOTE: You are advised to consult the publisher's version (publisher's PDF) if you wish to cite fromit. Please check the document version below.Document VersionPublisher's PDF, also known as Version of recordPublication date:1991Link to publication in University of Groningen/UMCG research databaseCitation for published version (APA):Verstegen, B. H. J. (1991). The functioning of hard cores in microeconomic theories of consumer behavior.s.n.CopyrightOther than for strictly personal use, it is not permitted to download or to forward/distribute the text or part of it without the consent of theauthor(s) and/or copyright holder(s), unless the work is under an open content license (like Creative Commons).The publication may also be distributed here under the terms of Article 25fa of the Dutch Copyright Act, indicated by the “Taverne” license.More information can be found on the University of Groningen website: https://www.rug.nl/library/open-access/self-archiving-pure/taverne-amendment.Take-down policyIf you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediatelyand investigate your claim.Downloaded from the University of Groningen/UMCG research database (Pure): http://www.rug.nl/research/portal. For technical reasons thenumber of authors shown on this cover page is limited to 10 maximum.Download date: 03-06-2022e u 4 r s y .In the introduction to this thesis we presented two theories from the field ofconsumer behavior, representing two bodies of knowledge. The first one wetook was the microeconomic textbook case, which we labeled 'the Hicks-Allen theory'. A second body of knowledge we represented by the consumerchoice process, which can be characterized by sequential phases such asproblem recognition, search and choice. We wanted to identify differencesamong these theories and relations between them. AIso, we wanted toidentify areas of application of the theories and differences between them.We formulated questions such as: Do these two conceptions of the consumerdiverge or not? And if so, does this mean differences in logic, applicability,descriptive or prescriptive power etc., or would it mean incomparability? Ifwe want to compare bodies of knowledge we need a methodology to guidesuch a comparison.In the first two chapters, a methodology, based on l.akatos' methodology ofscientific research programs was developed. Chapter 1 contained a briefintroduction to Lakatos's methodology and to the criticism it received. Inchapter 2 an elaboration of this methodology was presented, using Putnam'sschemata, which meets part of the criticism. Our methodology recognizedfour possible functions of hard cores, a prescriptive function and threedescriptive functions in the derivation of predictions, in the drawing ofinferences and in the trial and error method for solving the explanatoryproblem. To compare bodies of knowledge, in our conception hard cores, wecan try to find out which hard core to use for which purpose.ln chapter 3 we introduced the Hicks-Allen theory as a first hard core, andwe investigated whether it has the potential for functioning as a hard core.It appeared that the Hicks-Allen theory must either incorporate allvariables influencing the decision process, or it must identify whichvariables it does not incorporate and consider these constant, or it mustassume a separable utility function. In this last case it is not necessary toidentify variables which are not incorporated, provided that they areseparated from the other decision variables. If one of these threerequirements is met the Hicks-Allen theory can function as a hard core. Wetook the most general version of the Hicks-Allen theory as our startingpoint, since that version provides the highest degree of coherence betweenthe concepts it introduces (see chapter 2).In chapters 4 and 5 we investigated how the Hicks-Allen theory canperform the functions we identified in chapter 2. Although the Hicks-Allencapacities for descriptive applications can be doubted. A numoer c)r rs<rrurrJfor this were given. We also saw that the only manner for at leastmaintaining a limited form of the Hicks-Allen theory is given by theassumption of separable preferences. In addition, our viewpoint ofmethodological individualism was made explicit.Still speaking about the descriptive applications of hard cores, weintroduced in chapter 6 an alternative hard core. Recognizing that part ofthe criticism of the Hicks-Allen theory refers to the limited informationgathering and processing capacities of an individual, we presentd a theoryin which an individual first simplifies and then solves his choice problem.That is, a decison process in phases is built. In each phase the individualuses decision rules. We identified'other decision rules'used for simplifyingthe set of alternatives, and we identified rules used in 'expliciteconomizing' for ordering the limited set of alternatives. It appeared that,for the sake of consistency, the limited set of alternatives must be separatedfrom the set of alternatives which is ruled out in the first phases. Again wethe separability condition is encountered.In the chapters 7 and 8 we discussed the descriptive use of the alternativehard core. In chapter 7 the derivation of statements or predictions and inchapter 8 the drawing of inferences. We saw in chapter 7 that the Hicks-Allen theory in its general version can, but need not, be derived from thealternative hard core in two ways. Firstly, the Hicks-Allen theory can bethe endpoint of a repeated process in which the consumer consecutivelysolves gradually extending choice problems. Secondly, the Hicks-Allentheory can be the possible aggregate result of the use of the alternativehard core at the individual level. In both cases it appeared that thealternative hard core can be seen as a substructure or a prerequisite on whichthe Hicks-Allen theory can be built. Using the alternative hard core we canformulate the conditions under which the Hicks-Allen theory willmaterialize or not. In chapter 8 we saw how poorly the alternative hardcore functions in the drawing of inferences, since we lack the tools to do itproperly. AII we have is based on the one-phase Hicks-A-llen theory,whereas the alternative hard core is a multi-phase theory. We saw thatthe alternative core has more degrees of freedom than the Hicks-Allentheory, which makes it more suited for descriptive applications.148Notwithstanding its descriptive flavour we discussed the prescriptivecapacities of the alternative core in chapter 9. We saw there that it may beuseful in the descriptive-prescriptive connection at a low level of precision.Finally, it was concluded in chapter 10 that the differences between the twohard cores, as well as the differences between their afeas of application,are mainly due to the differences in their structure. The Hicks-Allentheory, which is a multi-phase theory, can be derived from the alternativehard core, being a more'phase theory, but not the other way around. Thisdifference accounts for the differences in degrees of freedom, in descriptiveor prescriptive functioning, in the capacities for drawing inferences etc. Amain conclusion drawn from the conclusions in section 10.5 was that differentfields of research based on the different hard cores which we consideredmay complement each other, as different fields of research may posedifferent questions at different levels of aggregation and require differenthard cores for different applications.

The functioning of hard cores in microeconomic theories of consumer behavior

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The functioning of hard cores in microeconomic theories of consumer behavior

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