Many asset pricing puzzles can be explained when habit formation is added to standard preferences. We show that utility functions with a habit then gives rise to a puzzle of consumption volatility in place of the asset pricing puzzles when agents can choose consumption and labor optimally in response to more fundamental shocks. We show that the consumption reaction to technology shocks is too s...

Interventions to change everyday behaviors often attempt to change people’s beliefs and intentions. As the authors explain, these interventions are unlikely to be an effective means to change behaviors that people have repeated into habits. Successful habit change interventions involve disrupting the environmental factors that automatically cue habit performance. The authors propose two potenti...

Habits are notoriously difficult to break and, if broken, are usually replaced by new routines. To examine the neural basis of these characteristics, we recorded spike activity in cortical and striatal habit sites as rats learned maze tasks. Overtraining induced a shift from purposeful to habitual behavior. This shift coincided with the activation of neuronal ensembles in the infralimbic neocor...

The dorsolateral striatum (DLS) is implicated in habit formation. However, the DLS circuit mechanisms underlying habit remain unclear. A key role for DLS is to transform sensorimotor cortical input into firing of output neurons that project to the mutually antagonistic direct and indirect basal ganglia pathways. Here we examine whether habit alters this input-output function. By imaging cortica...

By focusing on online stores, this study investigates the repeat purchase intention of experienced online buyers. Prior research on online behavior continuance models perceived usefulness, trust, satisfaction, and perceived value as the major determinants of continued adoption or loyalty, overlooking the important role of habit. Building on previous work in other disciplines, we define habit in...