On the arbitrariness of consumption

Abstract

We discuss a simple model of choices of joint consumption by a working couple who place maintenance of their marriage (relationship) above all else. Any proposal made by one partner seeking to provide maximal utility to the other so as to preserve the marriage, in the case where preferences of partners are unknown, will be accepted. In this sense consumption is arbitrary. In the concluding section, we suggest that while overly simple, this structure may characterize to some degree significant amounts of observed consumption, emphasizing how social arrangements and the value placed on them by individuals can impact on observed economic behaviour.

Acknowledgements

We acknowledge the helpful comments by John Piggott, Ray Riezman, Hui Huang and Edgar Cudmore. We acknowledge the financial support from National Natural Science Foundation of China (NSFC Grant 70825003), National Social Science' Foundation of China (SSFC Grant 07AJL002) and ‘Humanities and Social Science’ Major Projects, Chinese Ministry of Education (Grant Number 07JJD790145).

Notes

¹This lexicographic preference ordering is not, however, continuous.