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Predicting Utility Under Satiation and Habit Formation

Baucells, Manel; Sarin, Rakesh K. - In: Management Science 56 (2010) 2, pp. 286-301

We 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 … choice settings. If subjects underestimate the changes in satiation and habituation levels, as occurs under projection bias …

Persistent link: https://www.econbiz.de/10009191334

An Optimising Model for Monetary Policy Analysis: Can Habit Formation Help?

Fuhrer, Jeffrey C. - Reserve Bank of Australia - 1998

In earlier work (Fuhrer 1997a), I document what I view as the failure of standard models of representative consumer and firm behaviour to replicate the dynamics that we observe in the aggregate data. In essence, these models fail because they imply that both inflation and real variables must...

Persistent link: https://www.econbiz.de/10005423583

Decision Making Over Time and Under Uncertainty: A Common Approach

Prelec, Drazen; Loewenstein, George - In: Management Science 37 (1991) 7, pp. 770-786

This paper considers a number of parallels between risky and intertemporal choice. We begin by demonstrating a one-to-one correspondence between the behavioral violations of the respective normative theories for the two domains (i.e., expected utility and discounted utility models). We argue...

Persistent link: https://www.econbiz.de/10009214615

Should you Take a Lump-Sum or Annuitize? Results from Swiss Pension Funds

Buetler, Monika; Teppa, Federica - CESifo - 2005

We use a unique dataset on individual retirement decisions in Swiss pension funds to analyze the choice between an annuity and a lump sum at retirement. Our analysis suggests the existence of an “acquiescence bias”, meaning that a majority of retirees chooses the standard option offered by...

Persistent link: https://www.econbiz.de/10005405926

A language for the construction of preferences under uncertainty

LiCalzi, Marco - EconWPA - 2005

This paper studies a target-based procedure to rank lotteries that is normatively and observationally equivalent to the expected utility model. In view of this equivalence, the traditional utility-based language for decision making may be substituted with an alternative target-based language....

Persistent link: https://www.econbiz.de/10005118565

Should You Take a Lump-Sum or Annuitize? Results from Swiss Pension Funds

Bütler, Monika; Teppa, Federica - C.E.P.R. Discussion Papers - 2005

We use a unique dataset on individual retirement decisions in Swiss pension funds to analyze the choice between an annuity and a lump sum at retirement. Our analysis suggests the existence of an 'acquiescence bias', meaning that a majority of retirees chooses the standard option offered by the...

Persistent link: https://www.econbiz.de/10005666965

Biology as a Source of Non-convexities in Ecological Production Functions

Tschirhart, John - In: Environmental & Resource Economics 51 (2012) 2, pp. 189-213

Persistent link: https://www.econbiz.de/10010862718

Thaler’s “all-you-can-eat” puzzle: two alternative explanations

Caride, María José; Giménez, Eduardo L. - Departamento de Economía Aplicada, Facultade de … - 2004

presents some shortcomings, and in the end we provide a comple- mentary economic explanation involving the physical satiation …

Persistent link: https://www.econbiz.de/10011274421

Walras and dividends equilibrium with possibly satiated consumers.

Allouch, Nizar; Van, Cuong Le - Centre d'Économie de la Sorbonne, Université Paris 1 … - 2008

The main contribution of the paper is to provide a weaker non-satiation assumption than the one commonly used in the … literature to ensure the existence of competitive equilibrium. Our assumption allows for satiation points in the set of … individually feasible consumptions, provided that the consumer has satiation points available to him outside this set. As a result …

Persistent link: https://www.econbiz.de/10005220165

Sustainability and the Problem of Consumption

Witt, Ulrich - Volkswirtschaft Abteilung, Fachbereich … - 2011

Strong growth in disposable income has inflated consumption to unprecedented, but not sustainable levels. In this process consumer behavior has been changing. To explain the driving forces of this development, the paper introduces a theory of evolving consumer preferences that is molded in an...

Persistent link: https://www.econbiz.de/10009371964

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