Persistent cyclical consumption: Variations on the Becker-Murphy model of addiction

Wirl F & Feichtinger G (1995). Persistent cyclical consumption: Variations on the Becker-Murphy model of addiction. Rationality and Society 7 (2): 156-166. DOI:10.1177/1043463195007002004.

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Abstract

This article reconsiders a model of Becker and Murphy on rational addiction. Inter alia, they show that a psychological property of consumption (addiction or habits) can induce complex and, in particular, cyclical behavior (binges). The purpose of this article is to prove that economic reasons (the difference between individual discounting and market rates of interest) can explain rational cycles too.

Item Type: Article
Research Programs: World Population (POP)
Bibliographic Reference: Rationality and Society; 7(2):156-166 (April 1995)
Depositing User: IIASA Import
Date Deposited: 15 Jan 2016 02:05
Last Modified: 24 Aug 2016 14:23
URI: http://pure.iiasa.ac.at/4254

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