From technology transfer to market transformation

Panel: Panel 2: Dynamics of Consumption

Authors:
Carl Blumstein, University of California Energy Institute
Seymour Goldstone, California Energy Commission
Loren Lutzenhiser, Washington State University

Abstract

A central theme of this paper is the need to give more attention to the study of markets. Much of what is being done to promote energy efficiency involves efforts to change markets. (These activities are often described as being directed towards "market transformation"). But, while these activities are trying to influence markets, surprisingly little is known about real markets.

Some designers of policies and programs are too ready to think of "the market" as an abstraction, a place of exchange that, while it may suffer from some "imperfections", approximates the textbook model of fully informed actors making costless transactions that exchange abstract products. Real markets are more complicated than this.

Real markets are not just the sum of transactions among individuals Real markets have structure. This structure consists of rules governing the conduct of the market actors, relationships among the actors, and physical arrangements to facilitate exchange. In short, markets are not abstractions; they are social institutions.

Our thesis is that policies designed to change markets will be more effective if these policies are grounded in an understanding of markets. Toward this end we suggest that comparatively recent advances in the social sciences provide insights about the dynamics of real markets. These advances also provide a context for identifying some of the elements of a paradigm that may be useful for guiding research and improving our understanding of consumption behaviour and innovation in specific markets.