Satisficing Decision Procedure and Optimal Consumption-Leisure Choice

Sergey Malakhov

International Journal of Social Science Research, 2014, vol. 2, issue 2, 138-151

Abstract: The paper argues that a satisficing consumer decision equalizes marginal costs of search for satisficing price with the marginal benefit of search where the marginal costs of search are equal to the marginal loss in labor income and the marginal benefit of search is equal to the marginal savings on purchase. When the liquidity constraint is soft, a consumer maximizes the utility of his consumption-leisure choice with regard to the equality of marginal values of search. Therefore, the satisficing decision becomes optimal. And the equilibrium price of the satisficing optimal choice becomes equal to the willingness to accept.

Keywords: satisficing; optimal consumption-leisure choice; consumer behavior (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (13)

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Working Paper: Satisficing decision procedure and optimal consumption-leisure choice (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:mth:ijssr8:v:2:y:2014:i:2:p:138-151

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