Arbeitspapier

Optimal consumption choice for ratchet investors

The utility maximization problem of ratchet investors who do not tolerate any decline in their consumption rate is solved explicitly for all felicity functions in a Markovian framework which includes Brownian motion and Poisson processes as special cases. The optimal consumption plan turns out to be the running maximum of the optimal plan a conventional time-additive investor would choose.

Language
Englisch

Bibliographic citation
Series: SFB 373 Discussion Paper ; No. 2001,92

Classification
Wirtschaft
Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡
Subject
Intertemporal Consumption Choice
Habit Formation
Non-Time Separable Utility

Event
Geistige Schöpfung
(who)
Riedel, Frank
Event
Veröffentlichung
(who)
Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes
(where)
Berlin
(when)
2001

Handle
URN
urn:nbn:de:kobv:11-10051094
Last update
10.03.2025, 11:42 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Riedel, Frank
  • Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes

Time of origin

  • 2001

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