Predicting Utility Under Satiation and Habituation

Predicting Utility under Satiation and Habituation

We introduce a modification of the discounted utility model that accounts for both habituation and satiation in intertemporal choice. Habituation level and satiation level are state variables that induce changes in preferences as those states vary. We examine several properties of our model, discuss willingness to pay for an additional unit of consumption, and characterize the optimal consumpti...

Predicting Utility Under Satiation and Habit Formation

W introduce a modification of the discounted utility model that accounts for both satiation and habit formation in intertemporal choice. Preferences depend on the satiation level and the habitual consumption level. These two state variables, together with the shape of the value function, drive the properties of the model. One unique feature of our model is that it addresses the trade-off betwee...

Satiation in Discounted Utility

In this paper, we propose a model of intertemporal choice that explicitly incorporates satiation due to previous consumption in the evaluation of the utility of current consumption. In the discounted utility (DU) model, the utility of consumption is evaluated afresh in each time period. In our model, the utility of current consumption represents an incremental utility from the past level. When ...

Utility Assessment under Expected Utility and Rank Dependent Utility Assumptions

Motivational underpinnings of utility in decision making Decisionfieldtheory analysisof deprivation and satiation