Habit formation has been proposed as a possible solution to the equity premium puzzle. This paper extends the class of models that support the habits explanation in order to account for heterogeneity in earnings, wealth, habits and consumption. I find that habit formation does indeed increase the equity premium. However, contrary to earlier results, the habit hypothesis does not imply a price f...

This paper analyses the conduct of monetary policy in an environment where households’ desire to amass precautionary savings is influenced by fluctuations in the volatilities of disturbances that hit the economy. It uses a simple New Keynesian model with external habit formation that is augmented with demand and supply disturbances whose volatilities vary over time. If volatility fluctuations a...

This paper generalizes the standard habit-formation model to an environment in which agents form habits over individual varieties of goods as opposed to over a composite consumption good. We refer to this preference specification as “deep habit formation”. Under deep habits, the demand function faced by individual producers depends on past sales. This feature is typically assumed ad hoc in cust...

BACKGROUND Obsessive-compulsive disorder (OCD) is a psychiatric condition that typically manifests in compulsive urges to perform irrational or excessive avoidance behaviors. A recent account has suggested that compulsivity in OCD might arise from excessive stimulus-response habit formation, rendering behavior insensitive to goal value. We tested if OCD patients have a bias toward habits using ...

Acquisition and performance of instrumental actions are assumed to require both action-outcome and stimulus-response (S-R) habit processes. Over the course of extended training, control over instrumental performance shifts from goal-directed action-outcome associations to S-R associations that progressively gain domination over behavior. Lesions of the lateral part of the dorsal striatum disrup...

This study presents the first direct investigation of the hypothesis that dopamine depletion of the dorsal striatum in mild Parkinson disease leads to impaired stimulus-response habit formation, thereby rendering behavior slow and effortful. However, using an instrumental conflict task, we show that patients are able to rely on direct stimulus-response associations when a goal-directed strategy...

Urea kinetics were measured in normal women aged 22-34 years at weeks 16, 24 and 32 on either their habitual protein intake (HABIT) or a controlled intake of 60 g protein/d (CONTROL), using primed-intermittent oral doses of [15N15N]urea and measurement of plateau enrichment in urinary urea over 18 h (ID) or a single oral dose of [15N15N]urea and measurement of enrichment of urea in urine over t...