CentER

Willem Woertman

Abstract:
In Economics consumption decisions are typically modeled as all-encompassing one-shot decisions; making a consumption decision is thought of as determining a complete consumption plan, which gives a full specification of all present and future consumption. In contrast, this dissertation sets up a learning framework for consumption decisions. This alternative approach considers a sequence of smaller decisions, each of which determines only current consumption and savings, and it models a way in which making (efficient) trade-offs between consumption and savings is learned from the consequences of choices made in earlier periods. Then, this thesis extensively studies the theoretical relations that exist between the traditional and the alternative approach.

Full text