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Endogenous technological change with leisure-dependent utility


  • Paul A. de Hek

    () (Erasmus University Rotterdam, P.O.Box 1738, NL-3000 DR Rotterdam, THE NETHERLANDS)


This paper investigates the effect of introducing leisure-dependent utility into two models of endogenous technological change. Due to the flexibility in the labour supply the dynamics of the models change significantly. It is shown that if agents attach enough value to leisure in comparison to consumption two balanced growth paths may exist. This implies that economies with the same preferences and the same technology may experience different long-run growth rates.

Suggested Citation

  • Paul A. de Hek, 1999. "Endogenous technological change with leisure-dependent utility," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 14(3), pages 669-684.
  • Handle: RePEc:spr:joecth:v:14:y:1999:i:3:p:669-684 Note: Received: October 17, 1997; revised version: January 6, 1999

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    References listed on IDEAS

    1. Samet, Dov, 1998. "Common Priors and Separation of Convex Sets," Games and Economic Behavior, Elsevier, vol. 24(1-2), pages 172-174, July.
    2. Maxwell B. Stinchcombe, 1997. "Countably Additive Subjective Probabilities," Review of Economic Studies, Oxford University Press, vol. 64(1), pages 125-146.
    3. Heifetz, Aviad, 2006. "The positive foundation of the common prior assumption," Games and Economic Behavior, Elsevier, vol. 56(1), pages 105-120, July.
    4. Samet, Dov, 1992. "Agreeing to Disagree in Infinite Information Structures," International Journal of Game Theory, Springer;Game Theory Society, vol. 21(2), pages 213-218.
    5. Feinberg, Yossi, 2000. "Characterizing Common Priors in the Form of Posteriors," Journal of Economic Theory, Elsevier, vol. 91(2), pages 127-179, April.
    6. Morris, Stephen, 1995. "The Common Prior Assumption in Economic Theory," Economics and Philosophy, Cambridge University Press, vol. 11(02), pages 227-253, October.
    7. Geanakoplos, John, 1994. "Common knowledge," Handbook of Game Theory with Economic Applications,in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 2, chapter 40, pages 1437-1496 Elsevier.
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    Cited by:

    1. de Hek, Paul A., 2006. "On taxation in a two-sector endogenous growth model with endogenous labor supply," Journal of Economic Dynamics and Control, Elsevier, vol. 30(4), pages 655-685, April.
    2. Palmon, Oded & Bar-Yosef, Sasson & Chen, Ren-Raw & Venezia, Itzhak, 2008. "Optimal strike prices of stock options for effort-averse executives," Journal of Banking & Finance, Elsevier, vol. 32(2), pages 229-239, February.
    3. Ghiglino, Christian & Sorger, Gerhard, 2002. "Poverty Traps, Indeterminacy, and the Wealth Distribution," Journal of Economic Theory, Elsevier, vol. 105(1), pages 120-139, July.

    More about this item


    Endogenous technological change; Leisure-dependent utility; Multiple equilibria.;

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights


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