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How much and how often: A model of repeated consumption with endogenous consumption frequency

Author

Listed:
  • Liu, Liqun
  • Rettenmaier, Andrew J.
  • Saving, Thomas R.

Abstract

We study the consumption pattern for a "repeated good" in which individuals choose both consumption frequency and intensity in response to income, price and setup cost. Results include that increased setup costs reduce frequency and increase intensity, and that the effects of a setup cost increase are qualitatively different from those of a price increase or an income reduction.

Suggested Citation

  • Liu, Liqun & Rettenmaier, Andrew J. & Saving, Thomas R., 2011. "How much and how often: A model of repeated consumption with endogenous consumption frequency," Economics Letters, Elsevier, vol. 110(3), pages 186-188, March.
    • Handle: RePEc:eee:ecolet:v:110:y:2011:i:3:p:186-188
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    References listed on IDEAS

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    1. Saving, Thomas R, 1971. "Transactions Costs and the Demand for Money," American Economic Review, American Economic Association, vol. 61(3), pages 407-420, June.
    2. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    3. Cowen, Tyler & Tabarrok, Alexander, 1995. "Good Grapes and Bad Lobsters: Applying the Alchian and Allen Theorem," Economic Inquiry, Western Economic Association International, vol. 33(2), pages 253-256, April.
    4. Walter Y. Oi, 1971. "A Disneyland Dilemma: Two-Part Tariffs for a Mickey Mouse Monopoly," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 85(1), pages 77-96.
    5. Borcherding, Thomas E & Silberberg, Eugene, 1978. "Shipping the Good Apples Out: The Alchian and Allen Theorem Reconsidered," Journal of Political Economy, University of Chicago Press, vol. 86(1), pages 131-138, February.
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    Cited by:

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