Optimal Consumption under Uncertainty, Liquidity Constraints, and Bounded Rationality

I study how boundedly rational agents can learn the solution to an infinite horizon optimal consumption problem under uncertainty and liquidity constraints. I present conditions for the existence of an optimal linear consumption rule and characterize it. Additionally, I use an empirically plausible theory of learning to generate a class of adaptive learning algorithms that converges to the optimal rule. This provides an adaptive and boundedly rational foundation for neoclassical consumption theory

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Year of publication:	2012
Authors:	Özak, Ömer
Publisher:	[2012]: [S.l.] : SSRN
Subject:	Begrenzte Rationalität \| Bounded rationality \| Liquiditätsbeschränkung \| Liquidity constraint \| Konsumtheorie \| Consumption theory \| Privater Konsum \| Private consumption \| Risiko \| Risk \| Nachfragetheorie des Haushalts \| Consumer demand theory \| Einkommenshypothese \| Income hypothesis

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