Open Access. Powered by Scholars. Published by Universities.®
- Institution
Articles 1 - 2 of 2
Full-Text Articles in Entire DC Network
Veblen Effect, Search For Status Goods, And Negative Utility Of Conspicuous Leisure., Sergey V. Malakhov
Veblen Effect, Search For Status Goods, And Negative Utility Of Conspicuous Leisure., Sergey V. Malakhov
Sergey Malakhov
When expected savings on purchases are greater than the wage rate, the optimal search results in the negative marginal utility of leisure. The search transforms the classical backward bending effect and the leisure becomes complementary to the search. Consumers compensate “bad” leisure by status goods of exceptional quality on markets with high price dispersion. Status consumption complements “bad” conspicuous leisure and produces the Veblen effect as well as the “gardening aboard the boat” effect.
A Paradox Of Little Pre-Purchase Search For Durables: The Trade-Off Between Prices, Product Lifecycle, And Savings On Purchases, Sergey V. Malakhov
A Paradox Of Little Pre-Purchase Search For Durables: The Trade-Off Between Prices, Product Lifecycle, And Savings On Purchases, Sergey V. Malakhov
Sergey Malakhov
The paper describes the microeconomic trade-off between prices, savings on purchases, and the time horizon of the consumption-leisure choice during the search for different products. When marginal costs of the search are equal to its marginal benefit, the time of search is proportional to products’ lifecycles and it is inversely proportional to willingness to pay.