Satisficing decision procedure and optimal consumption-leisure choice
AbstractThe paper argues that when a consumer searches for a lower price, a satisficing decision procedure equalizes marginal costs of search with its marginal benefit. The consumer can maximize the utility of his consumption-leisure choice with regard to the equality of marginal values of search. Therefore, the satisficing decision procedure results in the optimizing consumer behavior.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 38964.
Date of creation: 22 May 2012
Date of revision:
satisficing; optimizing; consumption; leisure; search; reserve for purchases;
Find related papers by JEL classification:
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
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- Malakhov, Sergey, 2012. "A paradox of little pre-purchase search for durables: the trade-off between prices, product lifecycle, and savings on purchases," MPRA Paper 37376, University Library of Munich, Germany.
- Werner Güth & Gerlinde Fellner & Ev Martin, 2006. "Satisficing or Optimizing? - An Experimental Study," Papers on Strategic Interaction 2006-11, Max Planck Institute of Economics, Strategic Interaction Group.
- Simon, Herbert A, 1978. "Rationality as Process and as Product of Thought," American Economic Review, American Economic Association, vol. 68(2), pages 1-16, May.
- Malakhov, Sergey, 2012. "Veblen effect, search for status goods, and negative utility of conspicuous leisure," MPRA Paper 40809, University Library of Munich, Germany.
- Malakhov, Sergey, 2013.
"Money flexibility and optimal consumption-leisure choice under price dispersion,"
45197, University Library of Munich, Germany.
- Sergey MALAKHOV, 2013. "Money Flexibility And Optimal Consumption-Leisure Choice Under Price Dispersion," Theoretical and Practical Research in Economic Fields, ASERS Publishing, vol. 0(1), pages 77-88, July.
- Malakhov, Sergey, 2014. "Slutsky equation and negative elasticity of labor supply: behavioral bias or optimal consumption-leisure choice?," MPRA Paper 53871, University Library of Munich, Germany.
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