History-Based Choice Between Consumption Streams

Abstract

The empirical and experimental research reveals that an agent may manifest preferences which differ from the classical economics postulates. A few of such manifestations are utility from anticipation, preferences for improvement, preferences for happy endings and memorable consumptions. This paper studies those phenomena by static choices within a dynamic context. This research provides an axiomatic framework and a model which rationalises such decisions; furthermore, it shows that there is an additive utility function which represents the preferences with those specifications.