Time for Memorable Consumption

Stefania Minardi and Andrei Savochkin

No w0255, Working Papers from New Economic School (NES)

Abstract: A consumption event is memorable if the memory of it affects well-being at times after the material consumption. We develop an axiomatic model 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 wellknown phenomena in psychology, such as the peak-end rule, duration neglect, and adaptation trends. We provide foundations for a prominent special case of memory that has the Markovian property. The model is illustrated in application to life-cycle consumption-savings decisions and asset pricing.

Pages: 51 pages
Date: 2019-10-08
New Economics Papers: this item is included in nep-upt
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https://www.nes.ru/files/Preprints-resh/WP255.pdf (application/pdf)

Related works:
Journal Article: Time for memorable consumption (2024)
Working Paper: Time for Memorable Consumption (2020)
Working Paper: Time for Memorable Consumption (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:abo:neswpt:w0255

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