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Infinite horizon allocation with consumption-dependent utility

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Abstract

We consider an economy in which there is an infi nite stream of pies, each of size one, one in every period. For each agent, the per-period utility function, which is de fined on that period's consumption, is determined by the previous period's consumption. We describe speci fications of this model for which no symmetric, efficient, and monotonic way to allocate pies exists.

Suggested Citation

  • Peled, Dan & Rachmilevitch, Shiran, 2012. "Infinite horizon allocation with consumption-dependent utility," Working Papers WP2012/9, University of Haifa, Department of Economics, revised 18 Oct 2012.
    • Handle: RePEc:haf:huedwp:wp201209
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    More about this item

    Keywords

    Behavioral preferences; Dynamic models; Habits;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D30 - Microeconomics - - Distribution - - - General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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