Spontaneous Change, Unpredictability and Consumption Externalities: a Dynamic Approach to Consumer Choice

This paper presents a dynamic model of consumer choice incorporating consumption externalities. The model is deliberately minimalist and symmetric, so that there are no endogenous or exogenous factors causing consumers in aggregate to favour one particular commodity rather than another. Yet, the results of simulations show that remarkable switches and reswitches in patterns of demand can arise spontaneously and in ways that are emergent and unpredictable. The model lends force to the view that, changes in economic and social activity can occur even in the absence of any catalyst of change.