@article{7ec5cea3c2d240cdbda37fa57c471849,
title = "Tractable consumer choice",
abstract = "We present a rational model of consumer choice, which can also serve as a behavioral model. The central construct is TeX , the marginal utility of money, derived from the consumer{\textquoteright}s rest-of-life problem. It provides a simple criterion for choosing a consumption bundle in a separable consumption problem. We derive a robust approximation of TeX and show how to incorporate liquidity constraints, indivisibilities, and adaptation to a changing environment. We find connections with numerous historical and recent constructs, both behavioral and neoclassical, and draw contrasts with standard partial equilibrium analysis. The result is a better grounded, more flexible, and more intuitive description of consumer choice.",
keywords = "separable decisions, distributed choice, moneysworth demand, value for money",
author = "Daniel Friedman and Jozsef Sakovics",
year = "2015",
month = sep,
doi = "10.1007/s11238-014-9461-0",
language = "English",
volume = "79",
pages = "333--358",
journal = "Theory and Decision",
issn = "0040-5833",
publisher = "Springer Netherlands",
number = "2",
}