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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
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
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Simon, Herbert A, 1978. "Rationality as Process and as Product of Thought," American Economic Review, American Economic Association, American Economic Association, vol. 68(2), pages 1-16, May.
- Werner Güth & Gerlinde Fellner & Ev Martin, 2006. "Satisficing or Optimizing? - An Experimental Study," Papers on Strategic Interaction, Max Planck Institute of Economics, Strategic Interaction Group 2006-11, Max Planck Institute of Economics, Strategic Interaction Group.
- 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.
- 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, ASERS Publishing, vol. 0(1), pages 77-88, July.
- Sergey MALAKHOV, 2014.
"Slutsky Equation and Negative Elasticity of Labor Supply: Behavioral Bias or Optimal Consumption-Leisure Choice?,"
Expert Journal of Economics, Sprint Investify,
Sprint Investify, vol. 2(2), pages 80-84.
- 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.
- Malakhov, Sergey, 2012. "Veblen effect, search for status goods, and negative utility of conspicuous leisure," MPRA Paper 40809, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.