12 H. Hayakawa J. of Economic Behavior Org. 43 2000 1–34
to that group and of having attained the social status of that group. Hence, given a set of socially ranked reference groups and a vector of non-functional attributes of goods, one
may be able to contrive a measure that indicates to what extent any given commodity bundle satisfies one’s social want by taking the convolution of a reaction function and
vectors of non-functional attributes. The social want-satisfying property measured this way makes up an important part of the total serviceabilities of a commodity bundle. Thus, the
social capital and order we have identified reduce the burden of complex problem solving by substituting, in place of utilitarian psychologizing, learning of social norms called life
styles and by directing individuals to make use of these norms in the quest for higher social status identification.
4. A sequential satisficing of wants
The traditional approach to consumer behavior assumes that rationality is global and that wants are commensurable i.e., reducible to utility regardless of their origins. It ignores the
possibility that the internal physiology of a decision maker may not allow a common mea- surement of all different physiological needs. Moreover, as we argue, if the limited cognitive
capacity and other limiting conditions are the dominating features of the decision-making environment, individuals may be significantly motivated to economize on economizing by
searching for low-cost heuristics to otherwise complex choice problems and to turn to social and cultural norms i.e., life styles of social groups and a commonly shared system of cul-
tural value orientation as real sources of these heuristics and direction to guide emulation and avoidance motives. Embedded in a system of cultural value orientation, such motives
give rise to some well-structured social want, which, by its very nature, is distinctly different from any of the physical needs. If human wants, physical or social, differ so much in nature
to make them practically non-commensurate, it makes sense to model consumer choice as one of assigning priorities to differing wants and satisficing with respect to their relative
satiation levels.
For this reason, we take an approach based on Georgescu-Roegen’s 1954 hierarchical nature of human wants, Simon’s 1955, 1959 principle of satisficing see also Radner, 1975;
Radner and Rothschild, 1975, and Day’s 1987 prioritization of multiple ends. We assume 1 that wants are specific and not commensurable, 2 that they are prioritized and satisfied
sequentially under the principle of satisficing with respect to their aspiration levels relative satiation levels, and 3 that wants of physical nature are bounded by their aspiration levels
whereas no such restriction is placed a priori on want of social nature because this want is inherently relative to social norms. The primary physiological needs are assigned higher
priorities, to be followed by less basic ones and eventually by want of social nature.
Reviewing the literature, we find that the view that the decision maker’s actual choice process is sequential is at least as old as Menger and Jevons. They write:
An isolated farmer, after a rich harvest, has more than 200 hundred bushels of wheat at his disposal. A portion of this secures him the maintenance of his own and his family’s
lives until the next harvest, and another portion the preservation of health; a third portion assures him seed-grain for the next seeding; a fourth portion may be employed for the
production of beer, whiskey, and other luxuries; a fifth portion may be used for the
H. Hayakawa J. of Economic Behavior Org. 43 2000 1–34 13
fattening of his cattle. Several remaining bushels, which he cannot use further for these more important satisfactions, he allots to the feeding of pets in order to make the balance
of his grain in some way useful.
· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · We have seen that the efforts of men are directed toward fully satisfying their needs, and
where this is impossible, toward satisfying them as completely as possible. If a quantity of goods stands opposite needs of varying importance to men, they will first satisfy, or
provide for, those needs whose satisfaction has the greatest importance to them. If there are any goods remaining, they will direct them to the satisfaction of needs that are next
in degree of importance to those already satisfied. Any further remainder will be applied consecutively to the satisfaction of needs that come next in degree of importance Menger,
1950, pp. 129–131. . . . . . . Nor, when we consider the matter closely, can we say that all portions of the same
commodity possess equal utility. Water, for instance, may be roughly described as the most useful of all substances. A quart of water per day has the high utility of saving a
person from dying in a most distressing manner. Several gallons a day may possess much utility for such purposes as cooking and washing; but after an adequate supply is secured
for these uses, any additional quantity is a matter of comparative indifference. All that we can say, then, is that water, up to a certain quantity, is indispensable; that further quantities
will have various degrees of utility; but that beyond a certain quantity the utility sinks gradually to zero; it may even become negative, that is to say, further supplies of the same
substance may become inconvenient and hurtful Jevons, 1957, pp. 43–44. As seen in these quotations, three principles run through Menger’s and Jevons’s views
on human wants: 1 wants are specific and qualitatively different; 2 in the process of satisfying them, they are prioritized; and 3 they are bounded by their relative satiation
levels. In the subsequent development of economists’ choice theory, however, it has been assumed that wants of all origins are reducible to a common measurement called utility.
This utility theory then has expounded that it is only ordering of choice objects that matters in consumer choice. Thus, the fact that wants are prioritized has become replaced with the
principle of the diminishing marginal utility, or, more generally, with that of the diminishing marginal rate of substitution. As we shall show below, a sensible ordering of choice objects
is equally possible with non-commensurable and prioritized wants. It is this possibility that legitimizes a two-step choice process we propose below.
A couple of observations are in order. First, it has often been pointed out that human wants are dynamic in nature in the sense that the satisfaction of lower, more primary wants
awakens higher wants so that wants themselves are destined to grow in number over time. This aspect of wants has been dubbed as the principle of the subordination of wants or the
principle of the growth of wants see Menger, 1950, pp. 82–83; Marshall, 1920, pp. 86–91. While wants grow dynamically over time, they may be taken to be finite in number at a
given point in time.
Second, one’s priority ordering of wants and setting of their aspiration levels are likely to be socially and culturally influenced. Hence, it would not be surprising if individuals
who belong to the same society and share an identical cultural value orientation exhibited similar priorities and aspiration levels of wants. Different societies and cultures attach
14 H. Hayakawa J. of Economic Behavior Org. 43 2000 1–34
different values to human activities, and individuals’ orderings of wants are likely to reflect such social and cultural differences.
Third, the fact that social want is placed at the end of an ordering does not imply that social considerations are of the least importance when one’s budgetary resources are too
limited to satisfy many of the basic needs. Even in such situations, multiple means are likely to be available, and this multiplicity often calls for social considerations for further
guidance. This may account that even in a less affluent society, where individuals are still struggling for the basic needs, social pressures for conformity can coerce individuals to
choose, among many alternatives, those that invite less social sanctions. In an affluent society on which our attention is focused, most of the primary needs are satisfied and social
considerations occupy the mind of most individuals as they seek constantly higher social status identification. In such a society, social considerations do play a crucial role as an
instrument of indeterminacy reduction on the choice set. It is this fact that supports our assumption that the satisficing feasibility set i.e., the set of those choice objects that are
feasible and meet all of the physical needs to their aspiration levels is non-empty.
5. Sequential satisficing of wants
