Floating Utility Criterion in a Problem of Optimal Budget Distribution
Abstract
This paper investigates the concept of a floating utility criterion within consumer decision-making, incorporating insights from neuroeconomics and behavioral economics. It challenges the classical assumption of rationality by demonstrating that consumer utility depends not only on the set of goods but also on environmental and contextual factors.
A formal model is developed in which utility is influenced by external variables, leading to a dynamic optimization problem of budget distribution over time. The study further extends the model to intertemporal choice, including borrowing and lending decisions.
The results show that inaccuracies in forecasting environmental factors significantly affect optimal consumption decisions and overall utility, highlighting the importance of adaptive and context-sensitive modeling in economic analysis.
References
Ozhegov, E. (2009). Floating utility criterion in the problem of optimizing the allocation of budgetary transfers. Perm State University.
Ozhegov, E. (2009). Practical aspects of neuroeconomics.
Renvoisé, P., & Morin, C. (2007). Neuromarketing: Understanding the "buy buttons" in your customer's brain.
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