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Getting used to it: the adaptive global utility model

Bradford, W. David and Dolan, Paul (2010) Getting used to it: the adaptive global utility model. Journal of Health Economics, 29 (6). pp. 811-820. ISSN 0167-6296

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Abstract

This paper expands the standard model of utility maximization to endogenize the ubiquitous phenomenon of adaptation. We assume that total utility is an aggregate function of the utility associated with different domains of life, with relative weights that are optimized according to the effort that the individual expends on producing utility in each domain. Comparative statics from the general maximization problem demonstrate that the traditional Slutsky equation should incorporate an additional response term to account for adaptation processes. Our adaptive global utility maximization model can be used to explain responses to changes in health.

Item Type: Article
Official URL: http://www.journals.elsevier.com/journal-of-health...
Additional Information: © 2010 Elsevier
Library of Congress subject classification: H Social Sciences > HB Economic Theory
H Social Sciences > HC Economic History and Conditions
Journal of Economic Literature Classification System: D - Microeconomics > D0 - General
D - Microeconomics > D1 - Household Behavior and Family Economics > D11 - Consumer Economics: Theory
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search; Learning; Information and Knowledge; Communication; Belief
Sets: Departments > Social Policy
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 14 Feb 2011 10:29
URL: http://eprints.lse.ac.uk/32524/

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