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Ex Post Uncertainty and the Consumer Problem
Antoniadou, Elena - 2020
Wealth uncertainty may be resolved before consumption in which case consumption is optimal. But if uncertainty remains … expected utility with preferences over two goods, one of which is subject to additive ex post uncertainty. State preferences … comparative utility loss along the distribution of uncertainty and lattice theoretic properties allow us to determine how these …
Persistent link: https://www.econbiz.de/10014093348
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Consumption Dynamics Under Information Processing Constraints
Luo, Yulei - 2008
This paper studies how "rational inattention (RI)" -- a type of information processing constraint proposed by Sims (2003) -- affects the joint dynamics of consumption and income in a permanent income model with general income processes. Specifically, I propose an analytical approach to solve the...
Persistent link: https://www.econbiz.de/10014057462
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A Simple Method to Estimate the Roles of Learning, Inventories and Category Consideration in Consumer Choice
Ching, Andrew T.; Erdem, Tulin; Keane, Michael P. - 2015
Models of consumer learning and inventory behavior have both proven to be valuable for explaining consumer choice dynamics. In their pure form these models assume consumers solve complex dynamic programming (DP) problems to determine optimal choices. For this reason, these models are best viewed...
Persistent link: https://www.econbiz.de/10014037143
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On Habits and Addictions
Vanini, Paolo; Braun, Norman - 2010
According to the Becker-Murphy model, the consumption of a habitual good follows from forward-looking, maximizing, and time consistent choices on the basis of specific preferences. The ongoing use of such a good builds up a stock of consumption capital which, in turn, affects both its present...
Persistent link: https://www.econbiz.de/10014095994
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Dual Formulation of the Optimal Consumption Problem with Multiplicative Habit Formation
Kamma, Thijs; Pelsser, Antoon - 2022
This paper provides a dual formulation of the optimal consumption problem with internal multiplicative habit formation. In this problem, the agent derives utility from the ratio of consumption to the internal habit component. Due to this multiplicative specification of the habit model, the...
Persistent link: https://www.econbiz.de/10013307321
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Optimal search with costly recall
Janssen, Maarten C. W.; Parakhonyak, Alexei - 2008
This paper builds a consumer search model where the cost of going back to stores already searched is explicitly taken into account. We show that the optimal search rule under costly recall is very different from the optimal search rule under perfect recall. Under costly recall, the optimal...
Persistent link: https://www.econbiz.de/10011373816
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Consumer Search with Costly Recall
Janssen, Maarten - 2012
This paper builds a consumer search model where the cost of going back to stores already searched is explicitly taken into account. We show that the optimal search rule under costly recall is very different from the optimal search rule under perfect recall. Under costly recall, the optimal...
Persistent link: https://www.econbiz.de/10012755259
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Consumer search costs and preferences on the internet
Jolivet, Grégory; Turon, Hélène - 2014
We analyse consumers' search and purchase decisions on an Internet platform. Using a rich dataset on all adverts posted and transactions made on a major French Internet platform (PriceMinister), we show evidence of substantial price dispersion among adverts for the same product. We also show...
Persistent link: https://www.econbiz.de/10010436160
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Choice by Iterative Search
Masatlioglu, Yusufcan - 2009
In many real-life decisions, either information about alternatives is missing, or decision makers have limited cognitive capacity to go through all alternatives. To capture these situations, we propose and axiomatically characterize a new descriptive search model in which a decision maker...
Persistent link: https://www.econbiz.de/10013160298
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Consumer Search and Optimal Information
Dogan, Mustafa - 2019
This paper studies an information design problem in a sequential consumer search environment. Consumers, whose valuation of firm's products is uncertain, observe a noisy signal about the valuation upon being matched with a firm. The goal is to characterize those signal structures that maximize...
Persistent link: https://www.econbiz.de/10012895959