Continuous Market GrowthBeyond Functional Satiation

Market growth is driven by product innovation. Beyond functional satiationthe marginal utility of product performance and variety decreases. We argue that socialcomparisons underlying innovation diffusion results in consumer motivations for upwardassimilation toward the behavior of better performing others, even beyond functionalrequirements. We distinguish consumption growth patterns driven by functional vs.assimilating motivations. These patterns are tested by time-series analyses of U.S.Footwear consumption between 1955 and 2002. The acceleration of market growth sincethe 1970s is statistically explained by changes in price, cross-price elasticity, and theincreasing demand for innovations, according to our theoretical account of consumptionmotivations beyond functional satiation...