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A Brief Account on Hysteresis in Marketing - Perceptions, Implications and Future Developments

30 gennaio 2019 -
A Brief Account on Hysteresis in Marketing - Perceptions, Implications and Future Developments

Contributo selezionato da Filodiritto tra quelli pubblicati nei Proceedings “2nd International e-conference - Enterprises in the Global Economy 2017”

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Contribution selected by Filodiritto among those published in the Proceedings “2nd International e-conference - Enterprises in the Global Economy 2017”

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MORARU Andreea-Daniela [1] ANTOHI Ionut [2]

[1]Ovidius” University of Constanta, Faculty of Economic Sciences (ROMANIA)

[2]l.I.Cuza University of Iasi (ROMANIA)




In a rudimentary approach, hysteresis denotes the effects that persist after the causes that determined them have been removed. It was introduced in the 19th Century in the study of magnetism, and subsequently, it entered other fields such as ferroelectricity, biology, chemistry, and last but not least, social sciences. Its entry to economics is not at all surprising and here it found an extremely fertile soil for its implementation and future development.

Hysteresis has been acknowledged by the economic theory as having the potential to diminish the distance that separates economic modelling from reality and has provided elevated explanations for the evolutions of economic phenomena. In this paper, we contemplate the liaison between hysteresis and marketing and present the results of a qualitative study aimed at revealing the opinions and perceptions of a sample of economists on the existence of such connection. Further, we refer to the possible implications and future developments on the use of hysteresis in marketing.



The history of the hysteresis phenomenon can be traced back to the 19th Century when the physicist James Alfred Ewing [1] observed the effects of temporary exposure of ferric metals to magnetic fields. While conducting his research, it became clear that the subsequent states of the metals were described better by referring to their past states. He then introduced the new term “hysteresis” to describe irreversibility.

Although some attempts were made to persuade him to renounce at the term, he insisted on using it arguing that it was a generic phenomenon and that it would be observed in other fields as well. Indeed, soon after the term entered the fields of ferroelectricity, biology, chemistry, and social sciences. In social sciences, hysteresis proved its efficiency in describing the evolution of organizations and individual behaviour.

Its entry to economics is not at all surprising and here it found an extremely fertile soil for its implementation and future development. In a rudimentary approach, hysteresis denotes the effects that linger after the causes that determined them have been removed. It allows the advancement of explanations regarding the functioning of a dynamic system whenever the current state can be understood in a more detailed manner by reference to its past. The characterization of present phenomena using exclusively current values of the variables may be incomplete compared to the characterization provided by the use of hysteresis.

The concept is quite easy to understand and accept at an intuitive level, and its inclusion in the economic research is nothing but a natural consequence of the system’s evolution and of the increasing need for its understanding.  However, its actual implementation and its inclusion in economic modelling are far less intuitive and raise numerous issues.

Consequently, hysteresis has not yet been incorporated in orthodox economic models.

The present paper is a personal approach, naturally perfectible, orientated toward the investigation of the opinions of a sample of economists regarding the connection between hysteresis and marketing.


A Brief Note on Hysteresis and its Development within Economic Research

Although the term itself was introduced as late as 1881, the concept has a far greater history. Leibniz formulated the antithesis hysteresis – equations of state in the 17th Century arguing the theories of Descartes and Newton. Leibniz argued that the force of an object should be defined exclusively based on mass and present velocity and that the previous motion history is irrelevant. He, therefore, anticipated the issues raised by hysteresis in social sciences [2]. Descartes had proposed temporal hysteresis, while Newton had proposed space hysteresis; Leibniz rejected both arguing that for ontological reasons the past itself cannot have a greater influence on the present than that determined by the traces of the past in the present [2].

Should one consider ontological hysteresis to be impossible one cannot contest the existence of epistemological hysteresis. Even taking into account that the past can influence the present only by the effects of the past that follow up to the present, characterizing and describing present phenomena exclusively by using the current values of variables may prove incomplete as compared to the description and characterization provided by hysteresis, that is, bringing into attention the previous values of the variables.

Hysteresis may be therefore used to describe the functioning of systems for which ahistorical approaches are not a viable option. Such systems have a long-term memory and may be considered as “historical” [3].

Hysteresis is used in explaining the functioning of dynamic systems when the current state of the system may be better understood by reference to its past. It is, therefore, reasonable to consider that the assessment of a certain system to display hysteresis depends not only on the system characteristics but also on the individual assessment of the relevance of the previous states.

The intuitive nature of hysteresis facilitated its entry into various fields, including economics. Its introduction in economics is rather natural, considering that the neoclassic in their attempt to build the economic science embraced methods, equations, and metaphors from physics [4].

The economic science makes use of hysteresis to describe the persistent influence of past economic events, and taking into account the memory effects in the functioning of economic systems is considered a great progress in the economic theory and is credited with the potential to reduce the disagreement between modelling and reality [5].

The term entered the economic vocabulary rather recently. Before 1970’s, it was only seldom used. Schumpeter, Samuelson, Georgescu-Roegen or Phelps used it occasionally. The notion was however present in the works of Haavelmo (1970) [6] and von Weizsäcker (1971) [7] or in works dedicated to consumption, such as those of Duesenberry (1948) [8] or Modigliani (1949) [9]. Brown (1952) [10] also noticed in cases of both income increase and decrease, a lack of promptitude of consumer reactions which he attributed to an inertia he labelled as “hysteresis”.

Probably the best-known approach, which consecrated hysteresis, is that of Georgescu- Roegen (1971) [11]. Although he dedicated previous works to hysteresis [12], in The Entropy Law and the economic process, he described a general framework for applying hysteresis to social sciences and especially to the theory of consumer behaviour. After the 1970’s, hysteresis became a very sought-after topic, especially in two fields – unemployment and international commerce, following the ground-breaking works of Phelps (1972) [13] and Kemp and Wan (1974) [14].


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