Should Economic Efficiency Be the Primary Consideration for Competition Law - Free Essay Example

Sample details Pages: 8 Words: 2384 Downloads: 1 Date added: 2017/06/26 Category Economics Essay Type Analytical essay Level High school Did you like this example? Q.3 should economic efficiency be the primary consideration and priority for the enforcement of competition law? It is widely accepted that economic efficiency is the primary consideration and legitimate doctrine when contemplating the goal of competition law. This is agreed upon by both legal and economist scholars. [1] Economic efficiency brings about monumental benefits; it stimulates the economy, reduces the prices of products, and improves development innovation and creativity, creating new sources of capital.[2] Schweitzer has argued that competition law can never stand alone with just economic efficiency in a democratic society. Don’t waste time! Our writers will create an original "Should Economic Efficiency Be the Primary Consideration for Competition Law?" essay for you Create order The inclusion of public policy choices is inevitable.[3] This implements an idea that competition law is a myriad of broader national and public policies, strategies, priorities and interests. This suggests that it may not be such a good idea to place economic efficiency as the prime consideration of competition law. Merger regulations provide a good example to foster the idea that the governmentsà ¢Ã¢â€š ¬Ã¢â€ž ¢ goal for competition law goes beyond the maintenance of market competitiveness and towards a more social one.[4] Governments may find themselves inclined to prefer non-efficiency motivators due to pressure by interest groups accounting for their social needs.[5] Since there is influence from these non-economic objectives then it would seem that suggesting a framework to accommodate for these objectives would be necessary. However, although this would seem to show that non-efficiency objectives are indeed integrated into the internal part of competition law, this doesnà ¢Ã¢â€š ¬Ã¢â€ž ¢t mean that such objectives are followed by the judiciary or the competition law enforcement bodies.[6] This idea brings to life the understanding that although non-efficiency objectives are mentioned and voiced, it may only be done to please the many voices for it, as at the end of the day the enforcers have the discretion to pursue the objective which they see more suitable. More often than most being an economic one. In order to be able to appreciate the objectives of competition law, it is important to look at the specific legal system in question, as different systems have different priorities.[7] In less developed countries the focus of competition law policy falls on mostly social objectives. They usually have a liking in the protection of small businesses and decentralization of political economic power. [8] This would mean then that the idea of economic efficiency being the prime focus of competition law is frustrated. With that being said the questio n over the objective of competition law policy would be whether to achieve moral goals or to insure that the promotion of competition and economic efficiency is maximised.[9] Government intervention also has an important role to play in indentifying the priority of competition law policy in a country. Conservative and libertarian views are in favour of minimal government intervention and thus would opt for the objective of competition law to be based on economic efficiency.[10] Contrary to that, the more liberal views are more prone to support non-efficiency objectives such as the welfare of small businesses and the dispersion of power, in consequence, they are suspicious of corporate power.[11] When focusing on the economic efficiency, there is a usual disregard for the distribution or equity implications involved.[12] This is why we have the liberals who endeavour to protect those rights. There appears to have been a shift and focus on the objectives taken by different ju risdiction. This change has been towards a more economic efficiency base.[13] This was demonstrated by the UN conference of Trade and Development (UNCTAD), which indicated, à ¢Ã¢â€š ¬Ã‹Å"the trend is towards relatively greater emphasis upon competition, efficiency and competitiveness objectives.à ¢Ã¢â€š ¬Ã¢â€ž ¢[14] It has been stated that the allure of economic efficiency may have taken a global turn by different jurisdictions following under the same steps but this does not mean that other non-economic objectives donà ¢Ã¢â€š ¬Ã¢â€ž ¢t need to be considered.[15] Michael Porter argues that construing an entire body of law solely on consumer welfare theory could result in the overlooking important benefits for society. Competition law would not perform at its best and to its full promise if it did not account for societyà ¢Ã¢â€š ¬Ã¢â€ž ¢s benefit.[16] Porter is not the only believer that a solely economic efficient objective would not be appropriate for competition law p olicy. Professor Robert Pitofsky, supports this stance and adds that an entirely economic approach would lead to market domination by few corporate giants.[17] As a soltution, Maurice Stucke suggests that different objectives of competition law should be accepted à ¢Ã¢â€š ¬Ã‹Å"because these multiple goals reflect the various stakeholdersà ¢Ã¢â€š ¬Ã¢â€ž ¢[18] interests and concerns, which they want addressed.[19] It must be noted that judicial and legislative approaches towards non-efficiency goals are troubling. We have mentioned that economic efficiency is the preferred objective. However, it must also be determined that if the judicial and legislative bodies where against non-economic efficiency all together, they would enact or amend so as to provide primacy to economic analysis. This demonstrates that non-economic considerations should play a role within competition law.[20] On top of that, it is maintained by John Flynn that à ¢Ã¢â€š ¬Ã‹Å"although economic analysis provides valuable insights into business dynamics and the probable effects of a commercial practice in the market place, economics is not law.à ¢Ã¢â€š ¬Ã¢â€ž ¢[21] The competition policies are passed by politician and not by economists. In order to fulfil the aspiration of the people competition law ought to take into account all the peoples aspirations.[22] Professor Harry First also states that in pursing consumer welfare we inevitably satisfy the desire of citizens as a consumer only and that we ignore the inclination registered politically which consequently does not show up in the analysis of market place efficiency.[23] In focusing on economic efficiency or the à ¢Ã¢â€š ¬Ã‹Å"market efficiencyà ¢Ã¢â€š ¬Ã¢â€ž ¢ there is the issue that there is a failure to express peopleà ¢Ã¢â€š ¬Ã¢â€ž ¢s preference beyond their dollars.[24] So a preference for more expansive opportunities for a small business or preventing concentrations of economic power in private hands cannot be pr evented.[25] It does not make sense to ignore these preferences as the politics would point out that the public places value on these objectives.[26] The disregard of the peoples voice means that democracy is being forgone and in the process people may lose faith in competition law policies.[27] So many people are affected by competition law policies, therefore it would make sense that the consideration of both economic and non-economic objectives are accounted for in order to promote fairness. Stucke comments that à ¢Ã¢â€š ¬Ã‹Å"competition policy in democracy will never be captured by a single economic goal.à ¢Ã¢â€š ¬Ã¢â€ž ¢[28] The best way to overcome this once again to accommodate the self-interest of the people and lodge their hopes and fears I regards to competition.[29] By looking at what different jurisdiction have adapted we can have an idea of what has been working best. And by understanding what works best then we can determine whether we should focus on economic efficiencies. We can do this by using the merger control analysis.[30] The US courts have proven to focus their objectives on economic efficiency in their merger policies. The merger guidelines of 1992, demonstrate this as it has lowered the standard of proof for efficiency arguments.[31] Canada also provides an efficiency defence in their competition Act under Section 96. In the Act they set out a test to check the effects of the merger and balance it against the efficiency gains.[32] The producer and consumerà ¢Ã¢â€š ¬Ã¢â€ž ¢s losses and gains are reviewed.[33] The Canadians approach factor non-economic considerations and consider the protection of small and medium enterprises, and the balancing of such mergers against efficiency gains of the merger.[34] In the UK, the objective is on the à ¢Ã¢â€š ¬Ã‹Å"increase rivalry in the market into account in assessing whether a merger gives rise to any risk of a substantial lessening of competition.à ¢Ã¢â€š ¬Ã¢â€ž ¢[35] The Offi ce of fair trading which deals with the matter is allowed to use its discretion into these cases. The US holds the leading role of promoting the economic-efficiency objective whereas the European countries demonstrate a state of the mergers of both economic and non-economic efficiency objectives.[36] There has been a rise in the Chicago school of thought, which are fervent believer on the à ¢Ã¢â€š ¬Ã‹Å"economic approach.à ¢Ã¢â€š ¬Ã¢â€ž ¢ The Canadian competition law is like Europe in that it has managed to find a relative balance between the two objectives within a statutory framework. However, there is a penchant towards the economic efficient objective in practice.[37] The UK has shown to have preferred the economic efficient approach and has in consequence slowly give less weight to the importance attributed by statute to public interests concerns.[38] The task for a jurisdiction to accommodate non-economic efficiency is extremely difficult. Countries such as Israel are still in quest of a method to implement non-efficiency concerns in the Israeli competition law.[39] It has been found by Areeda and Hovenkamp that two approaches should be followed if economic-efficiency objectives should be applied. a) absence of collision with ambiguous statutory language.[40] b) institutional capability of à ¢Ã¢â€š ¬Ã‹Å"managing the information and decision-making process necessaryà ¢Ã¢â€š ¬Ã¢â€ž ¢ to implement such approach.[41] It has been pointed out however, that if too much attention is given to non-economic efficiency objectives when decisions are made then in the long run the economy will become less efficient, which will eventually affect the consumers negatively.[42] There seems to be a great need to combine both economic and non-economic efficient objective together. Blake and Jones have cited that the same rule of law may promote both objectives.[43] It is believed that non-efficiency objectives may be reached by ensuring market efficie ncy. In fact, what is believed is that economic efficiency is the à ¢Ã¢â€š ¬Ã‹Å"direct goalà ¢Ã¢â€š ¬Ã¢â€ž ¢ of competition, while the socio-political and other non-economic concerns are considered à ¢Ã¢â€š ¬Ã‹Å"ultimate goalsà ¢Ã¢â€š ¬Ã¢â€ž ¢.[44] The concern which many have with the Chicago school of thought is that the economic approach they eagerly defend brings about short term benefits. The merger guidelines that defend such thought[45] fails to take into account the social and political impact of mergers , which in the long run may lead to loss or transfer of jobs or an increasing political influence.[46] [1] Organisation for economic co-orperation development COECD, competition policy efficiency claims in horizontal agreements (Paris,) 1996), p.5. [2]O. Green.(2008). Integration of non-efficiency objectives in competition Law. LL.M.Thesis.Faculty of Toronto: Canada. P2 [3] H. Schweitzer. à ¢Ã¢â€š ¬Ã…“Competition law and public policy reconsidering an uneasy relationship: the example of Art. 81à ¢Ã¢â€š ¬Ã‚  (2007), p. 13. Available at SSRN : https://ssrn.com/abstract=1092883. [4] A. Ezrachi, à ¢Ã¢â€š ¬Ã…“The role of voluntary frameworks in multinational cooperation over merger controlà ¢Ã¢â€š ¬Ã‚ , 36 Geo. Wash. Int. L. Rev. 433, 438, n. 16 (2004). [5] O. Green.(2008). Integration of non-efficiency objectives in competition Law. LL.M.Thesis.Faculty of Toronto: Canada. P.3. [6] K.G Elzinga, à ¢Ã¢â€š ¬Ã…“The goals of antitrust: other than competition and efficiencies, what else counts?à ¢Ã¢â€š ¬Ã‚ ,125 U. Pa. L. Rev. 1182, 1203 (1977). [7] 6 ICN, Advocacy Working Group, Advocacy and Competition Policy (2002), p. 32; available at: https://www.internationalcompetitionnetwork.org/media/library/conference_1st_naples_2002/advocacyfinal.pdf. [8] M. Trebilcock et al., The Law and Economics of Canadian Competition Policy (Toronto, ON: University of Toronto Press, 2nd ed., 2003), p. 39. [9] P. Slot A. Johnson, An Introduction to Competition Law (Oxford, UK: Hart Publishing, 2006), p. 4. 35 Gal, à ¢Ã¢â€š ¬Ã…“Reality bites (or bits): the political economy of antitrust enforcementà ¢Ã¢â€š ¬Ã‚ , in: Hawk, ed., International Antitrust Law and Policy (Huntington, NY: Juris Publishing, 2001), p. 605, Part IV; available at SSRN: https://ssrn.com/abstract=901756. [10] Fox, à ¢Ã¢â€š ¬Ã…“The modernization of antitrust: a new equilibriumà ¢Ã¢â€š ¬Ã‚ , 66 Cornell L.R.. 1140, 1155 (1981). P.1156 [11] E. Sullivan J. Harrison, Understanding Antitrust and Its Economic Implications (Newark, NJ: Bender Co.: 4th ed., 2003), p. 2-3. [12] O. Green.(2008). Integration of non-efficiency objectives in competition Law. LL.M.Thesis.Faculty of Toronto: Canada. P.19. [13] C. Ehlermann L. Laudati, eds., European Competition Law Annual: The Objectives of Competition Law (Oxford, UK: Hart Publishing, 1998), p. ix [14] UNCTAD, The Basic Objectives and Main Provisions of Competition Laws and Policies (1995), p. 2; available at: https://www.unctad.org/en/docs/poitd_15.en.pdf. [15] O. Green.(2008). Integration of non-efficiency objectives in competition Law. LL.M.Thesis.Faculty of Toronto: Canada. P.21. [16] 6 M.E. Porter, Competition and Antitrust: A Productivity-Based Approach (2002), p. 2; available at: https://www.isc.hbs.edu/053002antitrust.pdf. [17] R. Pitofsky, à ¢Ã¢â€š ¬Ã…“The political content of antitrustà ¢Ã¢â€š ¬Ã‚ , 127 U. Pa. L.R 1051, 1056ff (1979) [18] M. Stucke, Better Competition Advocacy (2007), p. 51; available at: https://works.bepress.com/maurice_stucke /1. [19] O. Green.(2008). Integration of non-efficiency objectives in competition Law. LL.M.Thesis.Faculty of Toronto: Canada. P.22. [20] Id., p.23. [21] 1 Khemani, à ¢Ã¢â€š ¬Ã…“Objectives of Competition Lawà ¢Ã¢â€š ¬Ã‚ , in: World Bank-OECD, A Framework for the Design and Implementation of Competition Law and Policy (Paris, 1997), p. 5; available at: https://www.oecd.org/dataoecd/10/9/27122227.pdf. [22] J. Flynn, à ¢Ã¢â€š ¬Ã…“Antitrust jurisprudence: a symposium on the economic, political and social goals of antitrust policyà ¢Ã¢â€š ¬Ã‚ , 125 U. Pa. L.R. 1182, 1186 (1977).p.1186. [23] H. First, Book review of Posner, Antitrust Law: An Economic Perspective, 52 NYU L. Rev. 947, 947 (1977).p.966. [24] O. Green.(2008). Integration of non-efficiency objectives in competition Law. LL.M.Thesis.Faculty of Toronto: Canada. P.25. [25] H. Hovenkamp, à ¢Ã¢â€š ¬Ã…“Antitrust policy after Chicagoà ¢Ã¢â€š ¬Ã‚ , 84 Mich. L. Rev. 213, 242 (1985).p.241. [26] Ibid.,p242. [27] J. Burns, à ¢Ã¢â€š ¬Ã…“Vertical restraints, efficiency and the real worldà ¢Ã¢â€š ¬Ã‚ , 62 Fordham L. Rev. 597, 628 (1993) [28] M. Stucke, Better Competition Advocacy (2007), p. 26. [29] D. Dewey, à ¢Ã¢â€š ¬Ã…“Antitrust and economic theory: an uneasy friendshipà ¢Ã¢â€š ¬Ã‚ , 87 Yale L.J. 1516, 1525 (1978) [30] Competition Bureau (Canada), Treatment of Efficiencies in the Competition Act: Consultation Paper (2004), Appendix C. [31] W. Kolasky A. Dick, à ¢Ã¢â€š ¬Ã…“The Merger Guidelines and the integration of efficiencies into antitrust review of horizontal mergersà ¢Ã¢â€š ¬Ã‚ , 71 Antitrust L.J. 207, 208 (2003),p.209. [32] O. Green.(2008). Integration of non-efficiency objectives in competition Law. LL.M.Thesis.Faculty of Toronto: Canada. P.29. [33] J. Holsten, à ¢Ã¢â€š ¬Ã…“The Commissioner of Competition v. Superior Propane à ¢Ã¢â€š ¬Ã¢â‚¬Å" the Tribunal strikes backà ¢Ã¢â€š ¬Ã‚ , 2002 Canadian Competition Recor d 26, 31 (2002). [34] 1 Economic Council of Canada, Interim Report on Competition Policy (Ottawa: Queenà ¢Ã¢â€š ¬Ã¢â€ž ¢s Printer, 1969), p. 22. See Competition Bureau (Canada), Merger Enforcement Guidelines (2004), 8.19 [35] Office of Fair Trading, Mergers substantive assessment guidance (OFT 561, 2003), par. 4.30 [36] O. Green.(2008). Integration of non-efficiency objectives in competition Law. LL.M.Thesis.Faculty of Toronto: Canada. P.43. [37] Ibid., p.43. [38] Ibid.,p.43. [39] Ibid.,p.43. [40] P. Areeda H. Hovenkamp, Antitrust Law (New York, NY: Aspen Law and Business, 2002), vol. I (rev. ed.), p. 127. [41] Id., p.119. [42] B. Foer, à ¢Ã¢â€š ¬Ã…“The goals of antitrust: thoughts on consumer welfare in the U.S.à ¢Ã¢â€š ¬Ã‚  (American Antitrust Institute, Working Paper 05-09), p. 24 [43] H. Blake W. Jones, à ¢Ã¢â€š ¬Ã…“Toward a three-dimensional antitrust policyà ¢Ã¢â€š ¬Ã‚ , 65 Colum. L. Rev. 422, 424 (1965). [44] C. Ehler mann L. Laudati, eds., European Competition Law Annual: The Objectives of Competition Law (Oxford, UK: Hart Publishing, 1998), p. 30. [45] U.S. Department of Justice, Merger Guidelines (1984), reprinted in 4 Trade Reg. Rep. (CCH)  ¶13,103 [46] Sullivan, à ¢Ã¢â€š ¬Ã…“Post-Chicago economics: economists, lawyers, judges, and enforcement officials in a less determinate theoretical worldà ¢Ã¢â€š ¬Ã‚ , 63 Antitrust L.J. 669 (1995)

The Major Components Of Crime Prevention - 963 Words

In this essay I have been tasked to describe the major components of crime prevention. You might think that this is an easy thing to do however, there are many aspects to crime prevention and in order to define it we need to have an understanding of what crime prevention is. In this essay I will give you my definition of what crime prevention is as well as describe the major components of crime prevention. I will explain the relationship of crime prevention to the Criminal Justice System. I will then give you two or more institutions through which crime prevention programs and practices are delivered and then lastly I will utilize examples to support my discussion. My definition of crime prevention is the attempt or effort of a government to reduce and deter crime and criminals. It also encompasses the effort to enforce the law and uphold criminal justice. Crime prevention is an integral part of most of the components that make up the Criminal Justice System. The Criminal Justi ce System has five components and they are; law enforcement, prosecutors, defense attorneys, courts, and corrections. The one component that I do not believe crime prevention is a part of is defense attorneys. For each other component however, crime prevention I believe is close to the end state for each component. The relationship of crime prevention to each component in the Criminal Justice System starts with law enforcement. The Police Officer is the first line of defense against crime.Show MoreRelatedAnalysis Of Juvenile Justice Programs893 Words   |  4 PagesIntroduction Juvenile crimes in North Carolina are at an eight year high. Instead of funding more detention facilities across North Carolina, the  state should provide the funding for implementing effective treatments and programs to offer a chance of rehabilitation. Juveniles are  faced with lockdown facilities that suppresses cognitive growth and development. 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The Concepts Of Corporate Social Responsibility - 1456 Words

The concepts of corporate social responsibility (CSR) have been evolving for decades. At the very beginning, it was argued that corporation’s sole responsibility was to provide maximum financial returns to shareholders. However, it became quickly apparent to everyone that this pursuit of financial gain had to take place within the boundary of the legal system (Carroll, 1979;1991). Bowen’s 1953 publication of ‘Social Responsibility of Businessman’ was considered by many scholar to be the first definitive book, to explain the idea behind CSR. Following Bowen’s book, a number of works played a vital role in developing the social responsibility concept (Cheit, 1964; David Blomstrom, 1966; Carroll, 1979;1991). One of the factors†¦show more content†¦Joseph Guire (1963), acknowledged corporation’s primacy of economic concerns, but also accommodated a broader view of the firm’s social responsibility, suggesting that social responsibility are not only including but also moving beyond economic and legal considerations. Thus, it conceptualised social responsibility as something a firm considers in addition to economic and legal rationale. However some scholar have a dissimilar view, it has been argued that in order for a firm to achieve social responsibility, the behaviour of doing such charitable act must be voluntary, otherwise it will defeat the purpose for being ‘socially responsible’ (Manne Wallich, 1972). Correspondingly, alternate approach such as listing of areas in which business viewed as having responsibility have been used to uncover the true meaning of CSR (Carroll, 1979). As it has been argued that in order for CSR to be accepted by a conscientious business person, the concept should be framed in such a way that the entire range of business responsibilities are embraced (Carroll, 1991;1999). One of the first approach to include the scope of economic and non-economic concerns in defining social responsibility was the â€Å"three concentric circles† developed by the Committee for Economic Development (CED) in 1971. This model was the first to explain the three basic option corporations have when carrying out their responsibilities, including area such as

Consumer Decision Making Process

Question: Analyse theinternal and external factorsinfluencing the consumer decision making process for amajor purchase e.g. a car or a holiday. Answer: Introduction: The idea of the Consumer Buying Behaviorcan be designated as the buying behavioral pattern of the final consumers. Consumer Buying Behaviorconsists of the analysis of influencing factors those are instrumental in the process of decision making of the consumers buying decisions and how thy influence the decision of the customers. As opined by Hande and Ghosh 2015, a company needs to examinethe buying behaviorof the consumers as to utilize the decisive factors in developing its marketing strategy and thus ensuring the firms success. As opined by Ghosh and Ghosh 2013, the buying decision of a consumer can be influenced by a number of influencing factors. Theses factors are crucial to be evaluated by the companies to examine, as they are helpful in determining their strategy. However, these factors, which are influential in determining the consumer buying behavior, are manifold. There are a few internal and external factors, which are typically instrumental in determining the consumer bu ying behavior pattern. The case: In the following case study, the influential factors of the buying behavior of a person will be evaluated. A person with a moderate income lives in a locality of Australia. he did not have a car. Most of his neighbors and his friends owned cars, which are popular in the recent car market, and these are expensive too. His family and the friends told him to buy a car several times. However, he resisted it for a long. However, in the last month he bought a car, which is more expensive than his neighbors and friends. This is also causing him a budget cut in his daily routine. He was aware of this issue but he could not resist this buying decision. Now, with this real case study the author will examine the internal and external factorsinfluencing the consumers decision-making process for thismajor purchase of a car. The potential internal influences: As opined by Holland and Mandry 2013, there are a number of the internal factors are influential in the process of decision making of the consumers related to its buying. These internal factors typically mean the personal and the psychological factors of the consumers own self. As discussed by Prakash and Pathak 2014, this personal factor consists of the Perception, Learning, motivation, personality and attitude of the consumer. Now, if the Five Factor theory of the personality can be discussed, the buying behavior of the person in the case study can be identified (Gangai and Agrawal 2016). As discussed by Kumar 2015, the extrovert personality pattern is sometimes responsible for the extravagant buying behavior. The man in the case is also an extrovert. He has a large group of friends and he is popular in his group. He loved the idea to be popular among the friend circle by this buying decision. On the other hand, the core trait of instability is also there behind the decision of buying that car. The subject is a person who is moody and temperamental. His whimsical decision of buying can be cited as a proof of this claim. As opined by Gangai and Agrawal 2016, in many cases these personality patterns are influential in determining the extravagant buying behaviors of the consumers. Here, the learning factor of buying behavior can also be discussed. As opined by Khan 2013, the learning or the knowledge of the product or the services of a company determines the possibility of purchase of a product. Here, in the context of this case, the theory of cognitive learning can be discussed. The cognitive learning of the consumer can be discussed as the learning through the information gathering and intellectual processing. In the case of buying that car, the person set the goal of achieving popularity, increased social status and masculinity. The marketing and promotional advertisements have disseminated the idea that a consumer will be able to achieve all those by obtaining their car. It has driven him to the decision of buying a car. On the other hand, the attitude factors are also responsible for such decisions. As discussed by Badgaiyan and Verma 2014, customers attitudes are a mix of a consumers (1) idea about, (2) approach about, (3) and behavioral purpose toward some object. Here, in the context of this case, the person had a positive belief about the big and expensive cars and his positive feeling about the high-end brand shaped his buying intension. The advertisement also worked positively in shaping his attitude towards that brand. In addition to this, the motivational factors are also influential in determining the buying behavior pattern of the consumers. As discussed by Kumar 2015, according to the Maslows Hierarchy of Needs, people has a ladder of needs. When the basics are attended, the people want to obtain the higher level of requirements. In the context of this case, the person is a moderate earner. Hence, he may not have a physiological, Safety and Security Needs of the lower level of the Maslows Hierarchy of Needs. He is occupying the stage of social and ego needs. His social need of having popularity and the ego needs of status and self-esteem has driven him to buy an expensive car. In addition to this, if the examination of the McGuires Psychological Motives can be done, it can be found that the Affective preservation motives and Affective growth motives were instrumental in his decision-making. As discussed by Gangai and Agrawal 2016, here, his underlying motives were demonstrating his success to his neighbors and the sense of being powerful and wealthy by buying an expensive product. On the other hand, he has shown the manifest motives that a big car is more comfortable, it performs well and most importantly, most of his friends own such cars. All these typically influenced his buying behavior. His perception regarding that car has also influenced his buying behavior. As opined by Malik et al. 2013, the brand name of that particular company allured him to own that product. (Source: Hande and Ghosh 2015) The external or situational factors As opined by Khan 2013, there are a number of external or situational factors are there which influence the consumer buying behavior pattern. These external factors include Group Influence and Culture of the consumers. As man is a social animal, he cannot ignore the influence of the group. Now, the group influence mostly manipulates the purchase of the products like car, bike, etc. in the context of this case the ascribed group type i.e. the family influenced the buyer to buy that car. In addition to that, as mentioned by Singh 2013, the associative and the peer group i.e. his neighbors, friends and his colleges and their possession of cars made him decide in this way. The influence of the reference group influence i.e. the comparison between him and his friends regarding the ownership of car influenced him to buy a new and more expensive car. Here, the external factors influenced his internal drives to take a decision in favor of buying a car. In this discussed case, the expectations of the family member and the friends have driven the person to purchase that expensive car over an inexpensive one. The Aspirational reference group has also influenced his buying behavior. As opined by Gupta 2015, most of the branded and high-end car companies use the marketing strategy of celebrity endorsement. It creates an urge among the customers to be in the society of those celebrities. In the context of this discussed case, the person was also influenced by the urge of belonging in the same social status of those celebrities. In addition to this, the cultural values also determine the buying behavior of the consumers. As discussed by Holland and Mandry 2013, there are a number of cultural values, which can be cited as the determinant of the buying of a car. The environment oriented and self-oriented values like the idea of acquiring a higher cultural status, the materialistic culture of possession of wealthy products, the idea of immediate gratification of the materialistic urges were instrumental in determining his decision of buying that expensive car. His cultural values made him think that this car will provide him a better social status. He also possessed a materialistic view of life and it made him think about spending his money in acquiring the products of his choice as a way of seeking pleasure in life. Conclusion: Thus, theses internal and external or the situational factors were characteristically instrumental in shaping the purchasing choice of the consumer. The influence of the internal and external factors in the customer buying behavioral pattern is a very popular subject in the marketing management. The psychological factors are typically responsible for the buying decision of the customers. As discussed in the above case the demonstrative effect influenced the buyer to go beyond his buying capacity and compelled to buy that particular product. This demonstrative effect was originated by the influence of a number of deep-rooted internal factors. The personality pattern, motivations, learning and attitude of the person has driven him towards the influence of the demonstrative effect. 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