Heuristics as Decision Rules - Part I: The Cobb Douglas Consumer
Many consumption prices are highly volatile. It would certainly overburden our cognitive system to fully adjust to all these changes. Households therefore often rely on simple heuristics when deciding what to consume, e.g. in the form of a constant budget share for a specific consumption commodity, like a vacation, or of a constant consumption amount for low-cost commodities as food items. Using utility functions we can measure the welfare loss, caused by such heuristics, and to what extent this can be reduced by adaptation. In the present Part I the analysis is mainly restricted to a single consumerá with a Cobb-Douglas utility function. General utility functions will also be considered. Part II will study exchange economies
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): 18 (2001)
Issue (Month): ()
|Contact details of provider:|| Postal: Von-Melle-Park 5, 20146 Hamburg|
Phone: 49 40 42838-4457
Fax: 49 40 42838-6329
Web page: http://www.uni-hamburg.de/fachbereiche-einrichtungen/fb03/ise/index.html
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:hom:homoec:v:18:y:2001:p:177-197. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.