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Satisficing decision procedure and optimal consumption-leisure choice

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  • Malakhov, Sergey

Abstract

The 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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File URL: http://mpra.ub.uni-muenchen.de/38964/
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File URL: http://mpra.ub.uni-muenchen.de/42230/
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File URL: http://mpra.ub.uni-muenchen.de/49461/
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File URL: http://mpra.ub.uni-muenchen.de/57393/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 38964.

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Date of creation: 22 May 2012
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Handle: RePEc:pra:mprapa:38964

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Related research

Keywords: satisficing; optimizing; consumption; leisure; search; reserve for purchases;

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References

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  1. 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.
  2. 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.
  3. 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.
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Citations

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Cited by:
  1. Malakhov, Sergey, 2012. "Veblen effect, search for status goods, and negative utility of conspicuous leisure," MPRA Paper 40809, University Library of Munich, Germany.
  2. Malakhov, Sergey, 2013. "Money flexibility and optimal consumption-leisure choice under price dispersion," MPRA Paper 45197, University Library of Munich, Germany.
  3. 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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