Predicting Utility Under Satiation and Habit Formation
نویسندگان
چکیده
منابع مشابه
Predicting Utility Under Satiation and Habit Formation
W introduce a modification of the discounted utility model that accounts for both satiation and habit formation in intertemporal choice. Preferences depend on the satiation level and the habitual consumption level. These two state variables, together with the shape of the value function, drive the properties of the model. One unique feature of our model is that it addresses the trade-off betwee...
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We introduce a modification of the discounted utility model that accounts for both habituation and satiation in intertemporal choice. Habituation level and satiation level are state variables that induce changes in preferences as those states vary. We examine several properties of our model, discuss willingness to pay for an additional unit of consumption, and characterize the optimal consumpti...
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We propose a preference condition called shifted difference independence to model the reference point dependent measurable time preference. Based on this condition, we axiomatize a general habit formation and satiation model (GHS) to capture both effects of habit formation and satiation. This model allows for a general habit formation function and satiation function that contain the functional ...
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This paper extends the work on habit formation of Pollak [Habit formation and dynamic demand functions. J. Polit. Econ. (197O)J and provides a critical counterexample to a conjecture of von Weizslcker [Notes on endogenous changes of tastes, J. Econ. Theory (1971)J concerning the existence of a “longrun utility function.” A linear specification of habit formation is applied to a general system o...
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In this paper, we propose a model of intertemporal choice that explicitly incorporates satiation due to previous consumption in the evaluation of the utility of current consumption. In the discounted utility (DU) model, the utility of consumption is evaluated afresh in each time period. In our model, the utility of current consumption represents an incremental utility from the past level. When ...
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ژورنال
عنوان ژورنال: Management Science
سال: 2010
ISSN: 0025-1909,1526-5501
DOI: 10.1287/mnsc.1090.1113