utility functions are not concave-shaped but S-shaped. We justify the S shape using consumption-based asset pricing. We show … that various consumption-based asset pricing puzzles arise from the global concavity of the utility functions, and the S …-shaped consumption utility offers a solution. Also, the S-shaped utility helps explain the low elasticity of intertemporal substitution …

We solve Ireland's (1994) conspicuous consumption model (where social-status concerns are introduced into the utility … function) for Cobb-Douglas (CD) utility. In the resulting generalized CD consumer model, Engel curves are no longer limited to … of explaining empirically observed consumption patterns with a CD utility model …