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Persistent Cyclical Consumption

Author

Listed:
  • FRANZ WIRL

    (Technical University of Vienna)

  • GUSTAV FEICHTINGER

    (Technical University of Vienna)

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.

Suggested Citation

  • Franz Wirl & Gustav Feichtinger, 1995. "Persistent Cyclical Consumption," Rationality and Society, , vol. 7(2), pages 156-166, April.
    • Handle: RePEc:sae:ratsoc:v:7:y:1995:i:2:p:156-166
    DOI: 10.1177/1043463195007002004
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    References listed on IDEAS

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    3. Dockner, Engelbert J & Feichtinger, Gustav, 1993. "Cyclical Consumption Patterns and Rational Addiction," American Economic Review, American Economic Association, vol. 83(1), pages 256-263, March.
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    Cited by:

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    2. Joao Ricardo Faria, 1999. "Consumer Behaviour, Labour Supply and Diabetes: The Complex Case," Working Paper Series 88, Finance Discipline Group, UTS Business School, University of Technology, Sydney.
    3. Amnon Levy & João Faria, 2008. "Persistent high ambition and substance abuse: a rationalization of a vicious circle," Journal of Economics, Springer, vol. 94(3), pages 261-274, September.
    4. Alamar Benjamin & Glantz Stanton A., 2006. "Modeling Addictive Consumption as an Infectious Disease," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-24, March.

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