Consumer Theory with Inattention to Prices

Daniel Martin

No 379, 2016 Meeting Papers from Society for Economic Dynamics

Abstract: In this paper I propose a general model of consumption for consumers who are inattentive to prices. The behavioral implications of this model can be summarized by a set of non-parametric and testable restrictions on demand functions that are simple and bear a resemblance to classical restrictions, but are novel in their construction. The empirical performance of these restrictions is assessed using consumption data from setting where there is substantial evidence of inattention to prices: grocery store purchases.

Date: 2016
New Economics Papers: this item is included in nep-cse and nep-mkt
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed016:379

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