Increasingly, economists have acknowledged that a major limitation to economic theory has been its failure to incorporate human values and beliefs as motivational factors. This book explores how values and beliefs structure the dual processes of provisioning and consuming.

This paper studies the concavity of the consumption function of a habit-forming consumer with convex absolute risk tolerance. Habit formation is incorporated into a finite-horizon consumption-saving model of Carroll and Kimball (1996). I derive a condition under which the consumption function is...