As high-tech markets mature, replacement purchases inevitably become the dominant proportion of sales. Despite the clear importance of product replacement, little empirical work examines the separate roles of adoption and replacement. A consumer's replacement decision is dynamic and driven by...

Entry into a network industry is modeled, focusing on consumers' expectations formation. Equilibrium expectations are endogenous and they depend on prices, acting as a coordination device among consumers. The model is able to account for aggressive pricing policies by the incumbent and by the...

Autonomous demand shock affects consumption spending. Variation in consumption spending contributes to the volatility in aggregate demand. As the investor is risk averse, volatility of aggregate demand reduces investment. Government injects monetary noise to reduce the volatility in aggregate...

This policy brief discusses trends in consumer inflation uncertainty. Inflation uncertainty measures are from the Federal Reserve Bank of New York Survey of Consumer Expectations and from the Michigan Survey of Consumers

A theory in which the timing of consumer expectation adjustments is endogenously state-dependent and stochastic is proposed. These expectation adjustments generate highly heterogenous consumption responses to income windfalls: many households do not respond, those who do over-react, the marginal...

A prominent finding in the literature on gender competition is that women are less inclined to compete in comparison to men. In this paper, we conduct a laboratory experiment to examine the relevance of beliefs about the sex of potential competitors on men’s and women’s decision to enter...

Evaluating a new survey dataset of German consumers, we test whether individual consumption plans are formed according to an Euler equation derived from consumption life-cycle models. Estimating several consumption Euler equations, the results are mostly in line with the theory: We find evidence...

Variations in consumers' responsiveness to interest rates across households and over time may have important implications for monetary transmission. Survey questions from the Michigan Survey of Consumers provide an indication of the degree to which interest rates are a prominent consideration in...

In reciprocal interactions, both genuine kindness and self-interested material gain may motivate socially beneficial actions. The paper presents results from two experiments that distinguish the role of perceived motives in reciprocal decision making from the role of outcomes or perceived...