Arbeitspapier
Individual learning about consumption
The standard approach to modelling consumption/saving problems is to assume that the decisionmaker is solving a dynamic stochastic optimization problem However under realistic descriptions of utility and uncertainty the optimal consumption/saving decision is so difficult that only recently economists have managed to find solutions using numerical methods that require previously infeasible amounts of computation Yet empirical evidence suggests that household behavior conforms fairly well with the prescriptions of the optimal solution raising the question of how average households can solve problems that economists until recently could not This paper examines whether consumers might be able to find a reasonably good ’rule-of-thumb?approximation to optimal behavior by trial-and-error methods as Friedman (1953) proposed long ago We find that such individual learning methods can reliably identify reasonably good rules of thumb only if the consumer is able to spend absurdly large amounts of time searching for a good rule
- Sprache
-
Englisch
- Erschienen in
-
Series: Working Paper ; No. 444
- Klassifikation
-
Wirtschaft
- Thema
-
learning
consumption
saving
uncertainty
buffer-stocksa ving
Konsumtheorie
Lernprozess
Theorie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Allen, Todd W.
Carroll, Christopher D.
- Ereignis
-
Veröffentlichung
- (wer)
-
The Johns Hopkins University, Department of Economics
- (wo)
-
Baltimore, MD
- (wann)
-
2001
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:41 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Allen, Todd W.
- Carroll, Christopher D.
- The Johns Hopkins University, Department of Economics
Entstanden
- 2001
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