Time for memorable consumption

Stefania Minardi and Andrei Savochkin

Games and Economic Behavior, 2024, vol. 148, issue C, 296-322

Abstract: A consumption event is memorable if the memory of the event affects well-being at times after the material consumption, as originally introduced by Gilboa et al. (2016). Our main contribution is to develop an axiomatic foundation of memorable consumption in a dynamic setting. Preferences are represented by the present value of the sum of utilities derived at each date from the current consumption and from recollecting the past. Our model accommodates well-known phenomena in psychology, such as the peak-end rule, duration neglect, and adaptation trends. We also provide foundations for a prominent special case of the representation with the Markovian property. The model is illustrated with applications in two different contexts: risk-taking behavior in a principal-agent problem and life-cycle consumption-savings decisions.

Keywords: Memorable consumption; History dependence; Peak-end rule; Markovian preferences; Subjective well-being; Life-cycle dynamics (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0899825624001404
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Time for Memorable Consumption (2020)
Working Paper: Time for Memorable Consumption (2019)
Working Paper: Time for Memorable Consumption (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:148:y:2024:i:c:p:296-322

DOI: 10.1016/j.geb.2024.09.010

Access Statistics for this article

Games and Economic Behavior is currently edited by E. Kalai

More articles in Games and Economic Behavior from Elsevier
Bibliographic data for series maintained by Catherine Liu ().