A literal interpretation of neo-classical consumer theory suggests that the consumer solves a very complex problem. In the presence of indivisible goods, the consumer problem is NP-Hard, and it appears unlikely that it can be optimally solved by humans. An alternative approach is suggested,...

Consumption decisions are partly influenced by values and ideologies. Consumers care about global warming, child labor, fair trade, etc. Incorporating values into the consumer’s utility function will often violate monotonicity, if consumption hurts values in a way that isn’t offset by...

People often consume non-durable goods in a way that seems inconsistent with preferences for smoothing consumption over time. We suggest that such patterns of consumption can be better explained if one takes into account the future utility flows generated by memorable consumption goods,such as a...