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Pastimes : Austrian Economics, a lens on everyday reality

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To: Don Lloyd who wrote (307)	11/17/2003 5:40:59 PM
From: gpowell	Read Replies (1) of 445

The last dollar I spend this month in a series of smaller and smaller satisfaction-increasing exchanges There is no particular path requirement towards utility maximization. exchanges must be weighed against the expectation that any remaining unspent dollars will be available to take advantage of next month's half price sales and the like. Intertemporal considerations are already reflected in the reservation price of the decision maker. The decision maker faces the same set of intertemporal considerations before and after each exchange, all else being equal. This normally would mean that money resources would become scarce and higher valued well before satisfaction gains from exchange approach indifference. Arbitrarily close states are tangential to the reason I first introduced indifference states and we have stayed a bit from where I first introduced the concept. I need a reference to your 'reservation prices' You should find it in most microeconomics texts. Try – Intermediate Microeconomics by Hal R. Varian. ISBN: 0-393-97830-3.

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