Consumer sovereignty

In economics, consumer sovereignty is the assertion that consumer preferences determine the production of goods and services. The term was coined by William Harold Hutt in his book Economists and the Public (1936).^[1]

Overview

In a market economy, purchases of goods and services are evidence that demand for those items exists among those with liquid wealth. If potential sellers infer from these transactions that such demand will persist, then they may be motivated to provide the same goods in the future and to compete for future sales by attempting to offer such goods at competitive prices.^[2]^[3]

Some economists believe that consumer sovereignty rarely occurs, because these conditions^{[clarification needed]} are rarely met. Rarely do consumers get what they want; consumers get what they are offered.^[4] On the other hand, some economists believe that consumer sovereignty would be realized in a free market economy without interference from government or other non-market institutions.^[5]

References

^ Hutt, William H. (March 1940). "The Concept of Consumers' Sovereignty". The Economic Journal. 50 (197). Wiley: 66–77. doi:10.2307/2225739. Retrieved 4 April 2013.
^ Scitovsky, Tibor (1962). "On the Principle of Consumers' Sovereignty". American Economic Review. 52 (2). Retrieved 11 February 2013.
^ Lerner, Abba (1972). "The Economics and Politics of Consumer Sovereignty". American Economic Review. 62 (Mar. 1, 1972): 258–266. Retrieved 11 February 2013.
^ Commoner, Barry (1991). Anthony B. Wolbarst (ed.). The Illusion of Consumer Sovereignty. Smithsonian Institution Press.
^ Gonce, Richard A.; Richard A Walker, editor (1988). L. E. von Mises on Consumer Sovereignty. Edward Elgar Publishing Company. pp. 136–146. {{cite book}}: |author2= has generic name (help)

Joel Waldfogel - Does Consumer Irrationality Trump Consumer Sovereignty? 2004
Mario J. Rizzo and Douglas Glen Whitman - The Knowledge Problem of New Paternalism
J. P. Gunning - "Consumer Sovereignty: the Key to Mises’s Economics"
Campbell R. McConnell and Stanley L. Brue (1999, 14th ed.), Economics. McGraw-Hill
Persky, Joseph, "Retrospectives: Consumer Sovereignty," Journal of Economic Perspectives, 7 (1993), 183–191.

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[1] Hutt, William H. (March 1940). "The Concept of Consumers' Sovereignty". The Economic Journal. 50 (197). Wiley: 66–77. doi:10.2307/2225739. Retrieved 4 April 2013.

[Scitovsky-2] Scitovsky, Tibor (1962). "On the Principle of Consumers' Sovereignty". American Economic Review. 52 (2). Retrieved 11 February 2013.

[Lerner-3] Lerner, Abba (1972). "The Economics and Politics of Consumer Sovereignty". American Economic Review. 62 (Mar. 1, 1972): 258–266. Retrieved 11 February 2013.

[4] Commoner, Barry (1991). Anthony B. Wolbarst (ed.). The Illusion of Consumer Sovereignty. Smithsonian Institution Press.

[Gonce-5] Gonce, Richard A.; Richard A Walker, editor (1988). L. E. von Mises on Consumer Sovereignty. Edward Elgar Publishing Company. pp. 136–146. {{cite book}}: |author2= has generic name (help)

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v t e Consumer behaviour
Concepts	Consumption Autonomous consumption Induced consumption Consumer culture theory Consumer debt Consumer economy Consumer spending
Research types	Consumer choice Consumer economics Consumer neuroscience Consumer product Marketing research
Consumer attributes	Consumer confidence Consumer confusion Consumer ethnocentrism Consumer socialization Consumer's risk Consumption function Cultural consumer Homo economicus
Processes	Consumers' co-operative Consumer-to-business Factory-to-consumer Consumer service Consumerization

Consumer sovereignty

Overview

See also

References

Further reading