2023/08/25 by Mauro Bambi, Daria Ghilli, Bambi, Mauro +5
Decision Sciences · Economics, Econometrics and Finance · Social Sciences · #49-XX #91-10 #Economic theories and models #Experimental Behavioral Economics Studies #FOS: Mathematics #Game Theory and Applications #Optimization and Control (math.OC)
paper · pdf · doi:10.48550/arxiv.2308.13470
openalex publication_date 2023/08/25 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
In this paper, on the line e.g. of [COW00]) we investigate a model with habit formation and two types of substitute goods. Such family of models, even in the case of 1 good, are difficult to study since their utility function is not concave in the interesting cases (see e.g. [BG20]), hence the first order conditions are not sufficient. We introduce and explain the model and provide some first results using the dynamic programming approach. Such results will form a solid ground over which a deep study of the features of the solutions can be performed.