Money flexibility and optimal consumption-leisure choice under price dispersion
The synthesis of the G.Sigler’s rule of the optimal search with the classical individual labor supply model enlarges the understanding of the phenomenon of money flexibility. The constraints of the search model makes the Lagrangian multiplier equal to the marginal utility of the wage rate and establish the correspondence between the purchase price elasticity of the marginal utility of consumption expenditures, the wage rate elasticity of the marginal utility of money, and the wage rate elasticity of purchase prices. This correspondence can review the “leisure model” of behavior as well as the Veblen effect. The phenomenon of the sunk costs sensitivity also becomes more understandable.
|Date of creation:||07 Mar 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
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.:
- Malakhov, Sergey, 2012. "Veblen effect, search for status goods, and negative utility of conspicuous leisure," MPRA Paper 40809, University Library of Munich, Germany.
- Peter Diamond, 1985.
"Consumer Differences and Prices in a Search Model,"
404, Massachusetts Institute of Technology (MIT), Department of Economics.
- Mark Aguiar & Erik Hurst, 2006.
"Measuring Trends in Leisure: The Allocation of Time Over Five Decades,"
NBER Working Papers
12082, National Bureau of Economic Research, Inc.
- Mark Aguiar & Erik Hurst, 2007. "Measuring Trends in Leisure: The Allocation of Time over Five Decades," The Quarterly Journal of Economics, MIT Press, vol. 122(3), pages 969-1006, 08.
- Mark Aguiar & Erik Hurst, 2006. "Measuring trends in leisure: the allocation of time over five decades," Working Papers 06-2, Federal Reserve Bank of Boston.
- Malakhov, Sergey, 2012.
"Satisficing decision procedure and optimal consumption-leisure choice,"
38964, University Library of Munich, Germany.
- Sergey Malakhov, 2014. "Satisficing Decision Procedure and Optimal Consumption-Leisure Choice," International Journal of Social Science Research, Macrothink Institute, vol. 2(2), pages 138-151, September.
- Diamond, Peter A., 1971. "A model of price adjustment," Journal of Economic Theory, Elsevier, vol. 3(2), pages 156-168, June.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:45197. 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: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.