Consumer rationality and consumer sovereignty

Important social benefits of the market system are predicated on the assump tion that consumers can effectively pursue their interest in the marketplac e. Cause for concern exists to the extent that high consumption expenditure s lead to relatively low levels of personal savings in the U.S. To the exte nt that they do, in fact, over spend, consumers appear to deviate from econ omic assumptions of rationality. This paper examines four conceptions of ra tionality (two variants of rational choice theory, institutionalism, and on e derived from economic sociology), with a view to evaluating implications for consumer sovereignty under each. By explicitly accounting for differenc es among individuals, economic sociology appears to offer more realistic po licy solutions.