ECN 340 Lecture : Habits, Addictions, Traditions
23 Jan 2012
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Habits, addictions, and traditions y habitual behavior: a positive relationship between past and current consumption. Another way of looking at it is that past and current consumption are compliments. Examples of habits: using heroin, jogging, attending religious institutions. y the more i smoked in the past, the more i enjoy smoking now. y habits are harmful is present consumption lowers future satisfaction (utility). Example: smoking now will mean deterioration health and a shorter life in the future. Habits and addictions y habits are beneficial if greater present consumption raises future utility. Example: regular physical exercise. y very strong habits are more likely to be harmful than beneficial y a persistence of a habit requires that past consumption raises the satisfaction or present consumption. Immigrants often consume some bundle of goods in a new country as previously. Why? y preferences (habits) of children when formed are too difficult to change.
