Foundations of Intrinsic Habit Formation

Kareen Rozen ()

Econometrica, 2010, vol. 78, issue 4, 1341-1373

Abstract: We provide theoretical foundations for several common (nested) representations of intrinsic linear habit formation. Our axiomatization introduces an intertemporal theory of weaning a decision-maker from her habits using the device of compensation. We clarify differences across specifications of the model, provide measures of habit-forming tendencies, and suggest methods for axiomatizing time-nonseparable preferences. Copyright 2010 The Econometric Society.

Date: 2010
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Related works:
Working Paper: Foundations of Intrinsic Habit Formation (2009)
Working Paper: Foundations of Intrinsic Habit Formation (2008)
Working Paper: Foundations of Intrinsic Habit Formation (2008)
Working Paper: Foundations of Intrinsic Habit Formation (2008)
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