We consider a broad class of intertemporal economic problems and characterize the short-run long-run responses demand for good to permanent increase in its market price. Depending on interplay between self-productivity time discounting, we show that dynamic substitution effects can generate price elasticities opposite signs short run long run. (JEL D11, D15, H20, J22, J24)

The utilitarian aggregation rule requires social utility and beliefs to be a convex combination of individual utilities beliefs, respectively. Since, in the case belief heterogeneity, standard Pareto condition is incompatible with such separate aggregation, new condition, called belief-proof proposed alleviate occurrences spurious agreement by restricting unanimity that can considered reasonabl...

Concern for individual consumption relative to per capita consumption can induce a fear of falling behind which increases precautionary savings. This fear intensifies as societal income growth increases, allowing for a positive effect of growth on savings rates. JEL classifications: E21, D11, D91.

This paper shows that even if all consumers face search costs, if these are below a certain level dependent upon the firm numbers and demand elasticity, the Diamond-type equilibrium with all prices at the monopoly level fails to exist. JEL Classification: D83, D11,

We consider preference relations over information that are monotone: more information is preferred to less. We prove that, if a preference relation on information about an uncountable set of states of nature is monotone, then it is not representable by a utility function. JEL Classification: C70, D11, D80

People are sometimes risk-averse in gains but risk-loving in losses. Such behavior and other anomalies underlying prospect theory arise from a model of local status maximization in which consumers compare their wealth with other consumers of similar wealth. This social explanation shares key features with the psychological explanation offered by Kahneman and Tversky. JEL Classification: D81, D11

We show that a steeply increasing workload before a deadline is compatible with time-consistent preferences. The key departure from the literature is that we consider a stochastic environment where success of effort is not guaranteed. JEL Classification: D91, J22, D81, D11.

Marshallian consumer surplus (MCS) is generally an inaccurate measure of welfare change because it neglects income effects. Suppose these effects overturn the usual demand response to a price change. Then, the deadweight loss from a distortionary tax or subsidy has the wrong sign, that is, there is a spurious deadweight gain. JEL Classification: D11, D6.

In 1955, Herbert Simon introduced the notion of satisficing: an agent satisfices by searching for alternative that meets aspiration level but does not optimize. We survey more than 60 years advances in understanding satisficing economics, psychology, and management, identifying two research traditions address classes situations: under risk, is typically inferior to optimization strategies model...