Foundations of Intrinsic Habit Formation

We provide theoretical foundations for several common (nested) representations of intrinsic linear habit formation. Our axiomatization introduces an intertemporal theory of weaning a decision-maker from her habits using the device of compensation. We clarify differences across specifications of the model, provide measures of habit-forming tendencies, and suggest methods for axiomatizing time-nonseparable preferences.

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Year of publication:	2008-03
Authors:	Rozen, Kareen
Institutions:	Cowles Foundation for Research in Economics, Yale University
Subject:	Time-nonseparable preferences \| Linear habit formation \| Weaning \| Compensated separability \| Gains monotonicity

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Series:	Cowles Foundation Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Published in Econometrica, 2010 The price is None Number 1642R 39 pages
Classification:	C60 - Mathematical Methods and Programming. General ; D11 - Consumer Economics: Theory ; D90 - Intertemporal Choice and Growth. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005196007