ECN 340 Lecture Notes - Lecture 12: Church Attendance, European Cooperation In Science And Technology
18 Apr 2016
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Document Summary
Habitual behaviour: a positive relationship between past and current consumption. (the more you consumed of something in the past the more you will consume it now) Another way of looking at it is that past and current consumption are compliments. Example of complementarity between current and past consumption: the more i smoked in the past, the more i enjoy smoking now. Habits are harmful if present consumption lowers future satisfaction. Habits are bene cial if greater present consumption raises future utility. Very strong habits are more likely to be harmful than bene cial (people don"t go out on a rampage if they cant go to church, but if they cant have heroin they do) A persistence of a habit requires that past consumption raises the satisfaction of present consumption. Listening to a song in the past, brings you pleasure now. ( as you are enjoying music now, you are setting up pleasures for the future)
