Perceptions of the (In)stability of Consumer Behavior: A Preliminary Case Study of Interactions among Theory, Testing, and Policy

This article explores the evolution of perceptions of the behavior of consumers among economists and others. The article has three parts. The first part discusses the development of a hypothesis about the stability of this behavior: that the consumers know what they want, will pursue what they want, and do not need any help in doing so. The second part explores how this hypothesis was tested from around the turn of the century until the 1930s. The third part reflects on the consequences of the widespread rejection of this hypothesis for policy formation and for general discourse about the economy.