Symmetric smooth consumption externalities

Article Abstract:

Symmetric breakings in a sunspot equilibria, which is non-walrasian or non-Pareto efficient, are caused by the internalization of external effects through a network of markets between agents. This can be better understood by examining Balasko's concepts on asymmetric equilibria in mathematical models and Arrow's pure exchange economy model characterized by smooth consumption externalities.

Models, Equilibrium (Economics)

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Non-addictive habits: optimal consumption-portfolio policies

Article Abstract:

A model of preferences with non-addictive habits is formulated, where consumption is required to be non-negative at all times, but can fall below a "standard of living" index that aggregates past consumption. The consumption-portfolio problem is studied taking account of the non-negativity constraint on consumption.

United States, Forecasts, trends, outlooks, Forecasts and trends, Market trend/market analysis, Cost and standard of living, Cost of living

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