EconPapers    
Economics at your fingertips  
 

On time preference, rational addiction and utility satiation

Jean-Pierre Drugeon and Bertrand Wigniolle

Post-Print from HAL

Abstract: A basic consumer problem with a unique good is considered, current consumption of this good influencing in a positive manner consumer intertemporal utility, while past consumption exerts a negative influence. Moreover, in the line of Fisher, a specification of preferences is retained so that the rate of time preference, assumes a long-run value – this means for a stationary consumption-path – that is non-monotonic as a function of consumption: impatience increases for low level of consumptions but decreases for higher ones. Such a framework allows for an integrated appraisal of addiction, satiation and the rate of time preference. It is shown that the emergence of an addiction phenomenon in the neighbourhood of an unsatiated long-run position exactly corresponds to letting the rate of time preference be an increasing function of past consumption habits. When addiction becomes sufficiently strong, the unsatiated stationary state becomes unstable and the satiated steady state becomes the only admissible stationary position.

Keywords: Impatience; Consumption habits; Rational addiction; Satiation (search for similar items in EconPapers)
Date: 2007-04
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00185280
References: Add references at CitEc
Citations: Track citations by RSS feed

Published in Journal of Mathematical Economics, Elsevier, 2007, 43 (3-4), pp.249-286. ⟨10.1016/j.jmateco.2006.06.010⟩

Downloads: (external link)
https://halshs.archives-ouvertes.fr/halshs-00185280/document (application/pdf)

Related works:
Journal Article: On time preference, rational addiction and utility satiation (2007) Downloads
Working Paper: On time preference, rational addiction and utility satiation (2007) Downloads
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:hal:journl:halshs-00185280

DOI: 10.1016/j.jmateco.2006.06.010

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().

 
Page updated 2020-11-24
Handle: RePEc:hal:journl:halshs-00185280