Lecture 7 Flashcards
A System Lens on Consumption
Where is the economics of consumption placed in the course scheme?
In the society/macro level
System lens introduction: Coleman’s boat - from micro to macro
Macro (external) –> micro: contextual influence
Contextual constraint…!
Micro –> society: transformation as a community (flow)
Micro: action-formation; theories of individual behaviour
Macro reality can change opportunities and incentives for
individuals - also its beliefs can influence individuals differently
The concept of systems thinking and why it is important in scarcity and consumer choices
An integrative way to view a large and complex issue as part of a group or system of elements that function together as a whole
Based on the area of system dynamics (not closed)
Uses causal loop diagrams to visualize the relationships of
elements in a system, the patterns and behaviour of the system over time
Instrument to see where changes in structures can lead to significant, enduring improvements of the system
What is a system?
“A system is an interconnected set of elements that is coherently
organized in a way that it achieves something” (Meadows, 2008, p.11)
§ Elements
§ Interconnections
§ Function/ Purpose
Why is the concept of systems thinking important in scarcity and consumer choices
When thinking about how they couldn’t
change the scarcity with their own effort,
consumers will disengage from controlling
the deprivation by focusing on constructive
future actions
Individual perspectives will impact the
system by making the right choices! And the system will impact
consumer choices
Fuzzy cognitive mapping and agent-based modelling as research methods based on systems thinking
Consumer’s mind map example – plant based revolution
Macro-reality
Can change opportunities and incentives for
individuals - also its beliefs can influence individuals differently
Example:
When economy of your country is not good, this will impact our actions and beliefs and maybe even values on a long-term context
E.g. in Lisbon; showed Lisbon today and tomorrow with climate change (prediction by climate centrum by 30 years) to different groups
- When showed in 30 years –> buy more sustainable products etc
- Future will impact our actions as well
- Not everyone will believe or feel responsible (rural people), so won’t change their behaviour
Scarcity mindsets
Failures to reach
unattainable goals –> Reinforcing the myopia
responsible for the
perpetuation of the scarcity
Scarcity myopia
When consumer think about scarcity, they will stay on this negative myopia (lower cognitive power, because they are too focused on their scarcity)
Failure to reach goal: reinforce myopia –> don’t think in solutions (negative thoughts)
Only on a scarcity that you cannot control
How can financial-resource-scarce individuals stop
focusing on the negative reality and start working towards a more
positive future?
Scarcity Immutability
Scarcity Immutability
Consumers
might be better off disengaging temporarily from trying to solve
their scarcity troubles
Facing scarce resources that cannot be controlled; sometimes we are unable to reduce the scarcity in resources even if a reasonable amount of effort is invested. For instance, when the resources are not immediately available, beside our efforts
Studies Overview
on Scarcity Immutability
Focus on the reasons why resolving the resource scarcity was not attainable in the past, will lead consumers to temporarily disengage
from replenishing their scarce resources and plan the future!
- Immutability will result in a constructive/optimistic future mindset;
- Greater attention to future concerns;
- Greater commitment to long-term goals;
- Less myopic financial and non-financial decisions
Higher cognitive power –> system II thinking
Mutability
Manipulation
Sometimes we are able to reduce the scarcity of resources when a reasonable amount of effort is invested. For instance, when the resources turn available after we strive to get them
- Less future focussed
How can individual actions can be seen in our
system?
-Immutability –> save money for future
Among people who feel deprived of their financial resources, believing that live outcomes are immutable acts
as a relief valve that allows them to focus their attention
elsewhere, resulting in more constructive future-oriented
actions and decisions, as evidenced in their greater savings
–> Would impact macro-level
–> In the future you then could have control after having money and education
