Malakhov, Sergey (2014): Slutsky equation and negative elasticity of labor supply: behavioral bias or optimal consumption-leisure choice?
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Abstract
One of the applications of the prospect theory is the behavioral phenomenon of the negative elasticity of the individual labor supply. This working paper argues that the negative elasticity of labor supply can be understood better with the help of the interpretation of the Slutsky equation with regard to the common consumption-leisure choice.
Item Type: | MPRA Paper |
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Original Title: | Slutsky equation and negative elasticity of labor supply: behavioral bias or optimal consumption-leisure choice? |
Language: | English |
Keywords: | Slutsky equation, prospect theory, labor supply, consumption-leisure choice |
Subjects: | D - Microeconomics > D1 - Household Behavior and Family Economics > D11 - Consumer Economics: Theory |
Item ID: | 53871 |
Depositing User: | Sergey Malakhov |
Date Deposited: | 22 Feb 2014 05:39 |
Last Modified: | 26 Sep 2019 18:11 |
References: | 1. Barnett, V. (2006) ‘Chancing an interpretation: Slutsky’s random cycles revisited.’ European Journal of History of Economic Thought, 13 (3), 411 – 432. 2. Camerer, C., Babcock, L., Loewenstein, G., Thaler, R. (2000) ‘Labor Supply of New York City Cab Drivers: one day at a time’. Part V. Applications in Choices, Values, and Frames. D.Kahneman and A. Tversky (Eds.), Cambridge: Cambridge University Press, pp. 356-370. 3. Chipman, J.S., Lenfant, J.-S. (2002) Slutsky’s 1915 Article: How It Came to be Found and Interpreted. History of Political Economy, 34 (3), 553-597. 4. Cook, P.J. (1972) ‘A “One Line” Proof of the Slutsky Equation.’ American Economic Review, 62 (1/2), 139. 5. Malakhov, S. (2012) ‘Satisficing Decision Procedure and Optimal Consumption-Leisure Choice.’ http://works.bepress.com/sergey_malakhov 6. Malakhov, S. (2013a) ‘Money Flexibility and Optimal Consumption-Leisure Choice’ Theoretical and Practical Research in Economic Fields, IV (1), 77-88. 7. Malakhov, S. (2013b) ‘A note on the synthesis of the satisficing concept and the neoclassical theory.’(in Russian). Odessa: Economics, II, 86-105. 8. Malakhov, S. (2014) ‘Sunk Costs of Consumer Search: Economic Rationality of Satisficing Decision’ http://works.bepress.com/sergey_malakhov 9. Nicholson, W. (1992) ‘Microeconomic Theory: basic principles and extensions” 5th ed. Dryden Press, Fort Worth. 10. Rousslang, D.J., Tokarick, S.P. (1995) ‘Estimating the Welfare Cost of Tariffs: The Roles of Leisure and Domestic Taxes.’ Oxford Economic Papers New Series, 47 (1), 83-97 11. Shafir, E., Diamond, P., Tversky, A. (1997) ‘Money Illusion' Quarterly Journal of Economics, 112 (2) 341-374. 12. Slutsky, E.E. (1915 [1952]) ‘Sulla teoria del bilanco del consumatore’ G. Econ. Riv. Statist., 51,1-26. - Engl. transl.: On the theory of the budget of the consumer // Readings in price theory / Eds. by G. J. Stigler, K. E. Boulding. Homewood (111.), 1952. P. 27-56. 13. Slutsky, E.E. (1927). Slozhenie sluchainykh prichin, kak istochnik tsiklicheskikh protsessov.Voprosy kon’’yunktury, 3, 34 – 64. 14. Slutsky, E.E. (1937). The summation of random causes as the source of cyclical processes. Econometrica, 5, 105 – 46. 15. Thaler, R. (1980) “Toward a Positive Theory of Consumer Choice”. Journal of Economic Behavior and Organization, 1, 39-60. |
URI: | https://mpra.ub.uni-muenchen.de/id/eprint/53871 |
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