Abstract
A time-discrete descriptive model of habit formation is presented. Addictive behaviour is damped by a threshold which adapts itself to the habit. This simple framework is able to explain periodic, quasi-periodic as well as chaotic consumption patterns of addictive consumers. It turns out that both a high adjustment rate and a steep consumption function favour complex (chaotic) patterns.
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Feichtinger, G., Prskawetz, A., Herold, W. et al. Habit formation with threshold adjustment: Addiction may imply complex dynamics. J Evol Econ 5, 157–172 (1995). https://doi.org/10.1007/BF01199855
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DOI: https://doi.org/10.1007/BF01199855