The psychology of early institutional economics: The instinctive approach of Thorstein Veblen's conspicuous consumer theory

Abstract

Abstract Thorstein Veblen, a founder of original or old institutional economics, combined social and evolutionary thought in his institutionalist approach to dealing with psychological, social, and economic issues. The psychological content of Veblen's writings takes instinct and habits into consideration. The economic literature on the psychological content of Veblen's writings has focused on habits, despite the importance of instincts in Veblen's works. This paper attempts to discuss Veblen's notion of instincts in order to make its role clearer in his approach to conspicuous consumer decision making. It discusses the role of instincts, the instinct of workmanship, the relationship between habits and instincts, and their influence on the conspicuous consumer. Consequently, this paper contributes to a better understanding of how inner forces and socialization culminate in behavior in Veblen's conspicuous consumer approach.