Metamorphoses of satisficing optimal consumption-leisure choice: inequality aversion, risk aversion, and family altruism
The paper discovers attitudes towards risk and inequality under satisficing optimal consumption-leisure choice. The search for satisficing price that equalizes marginal costs of search with its marginal benefit, matches risk aversion with inequality seeking behavior. The risk neutrality could happen under the decreasing marginal utility of money that creates the unstable equilibrium. This unstable equilibrium could result either in the waste of money under the Veblen effect, or in the mathematical “fold” catastrophe of family altruism. The paper argues that the move from risk aversion to risk seeking happens when the consumer begins to invest in children.