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- W1543289528 abstract "Dynamic modeling of demand for goods whose cumulated stocks enter an intertemporal utility function as latent variables, is discussed. The issues include: how represent addiction, how handle unobserved expectations and changing plans, how deal with `dynamic inconsistency'? Arguments are put forth to give all optimizing conditions attention, not only those in which all variables are observable. If the latter, fairly common, `limited information-reduced dimension' strategy is pursued, problems are shown to arise in attempting to identify coe±cients of the preference structure and to test for addictive stocks. Examples, based on quadratic utility functions, illustrate the main points and challenge the validity of testing the `rational addiction' hypothesis, by using linear, single- equation autoregressive models, as suggested by Becker, Grossman, and Murphy (1994) and adopted in several following studies." @default.
- W1543289528 created "2016-06-24" @default.
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- W1543289528 date "2009-12-15" @default.
- W1543289528 modified "2023-09-27" @default.
- W1543289528 title "Modelling addiction in life-cycle models: Revisiting the treatment of latent stocks and other unobservables" @default.
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