The Economics of Abundance

The Economics of Abundance

Affluent Consumption and the Global Economy

New Directions in Modern Economics series

Brendan Sheehan

This book addresses the challenge posed by J.K. Galbraith over 50 years ago to make a constructive contribution to a different style of economic analysis – the economics of abundance. It identifies a system of abundance inhabited by the ‘people of plenty’ and illustrates that the driver of growth in this system is spending by affluent consumers. This timely book provides essential heterodox economic theory to explain this spending and explore its key drivers and constraints.

Chapter 5: Cognitive Consumption

Brendan Sheehan

Subjects: business and management, entrepreneurship, economics and finance, institutional economics


A. INTRODUCTION It is now possible to investigate the cognitive domain of affluent consumers. This is important as all consumption has a cognitive dimension in the sense that spending decisions require consumers to think. The ways in which the people of plenty think also stimulates various drivers of and constraints upon consumer spending – which can be categorised as cognitive consumption. The institution of marketing has an important role in cognitive consumption, seeking to amplify the drivers of spending and relax the constraints. The analysis of cognitive consumption completes the answer to the question of why affluent consumers consume. Cognitive consumption by the people of plenty is primarily driven by inquisitiveness. The insatiable urge to ask questions and seek answers is the fertile soil in which consumption grows; it is a prime mover in both learningbased spending and selective search consumption. There is also a cognitive dimension to the Diderot effect that was mentioned in the previous chapter. The Diderot effect can best be thought of as a dynamic subjective-cognitive driver of spending. In addition there are important cognitive constraints on consumption resulting from the limitations on the cognitive capacities for thinking. These limitations motivate affluent consumers to avoid thinking and thereby constrain spending. What is more, the previously mentioned monetary constraint on spending has a strong cognitive dimension that should be explained. To properly appreciate the complex character of cognitive consumption it is first necessary to have a thorough analysis of the cognitive domain. For consumers there are two aspects...

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