Marketing is an applied science that tries to explain and influence how firms and consumers actually behave in markets. Marketing models are usually applications of economic theories. These theories are general and produce precise predictions, but they rely on strong assumptions of rationality...

The standard approach to modeling intertemporal consumption is to assume that consumers are solving a dynamic optimization problem. Under realistic descriptions of utility and uncertainty—stochastic income and habit formation-- these intertemporal problems are very difficult to solve....