Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/43777 
Authors: 
Year of Publication: 
2007
Series/Report no.: 
Working Papers No. 394
Publisher: 
Bielefeld University, Institute of Mathematical Economics (IMW), Bielefeld
Abstract: 
Duesenberry introduced the notion of a ratchet investor who does not tolerate any decline in her consumption rate. We connect the demand behavior of such an agent to the behavior of standard time-additive agents. A ratchet investor demands the running maximum of the optimal plan a conventional time-additive investor with lower initial wealth would choose.
Subjects: 
Intertemporal consumption choice
Habit formation
Non-time separable utility
JEL: 
D91
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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