Time for Memorable Consumption

Stefania Minardi and Andrei Savochkin

No 1353, HEC Research Papers Series from HEC Paris

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 well-known 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. "

Keywords: consumption; peak-end rule (search for similar items in EconPapers)
JEL-codes: D11 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2019-10-10
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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:ebg:heccah:1353

DOI: 10.2139/ssrn.3466759

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