This paper presents a formal model in which differential satiation dynamics of various consumer needs translate into long-run changes of consumer behavior when income rises. In the model individuals allocate their income to the consumption categories proportional to need deprivation states...

This paper presents a formal model in which differential satiation dynamics of various consumer needs translate into long-run changes of consumer behavior when income rises. In the model individuals allocate their income to the consumption categories proportional to need deprivation states...

Schumpeter’s and Hayek’s view of market coordination as being not aboutefficiency, but about endogenous change and never-ending discovery has beenincreasingly recognized even by the mainstream of economics. Underlying this view isthe notion of creative learning agents who bring about...