Erdem, Mahmut2016-01-082016-01-082001http://hdl.handle.net/11693/14852Ankara : Department of Economics and the Institute of Economics and Social Sciences of Bilkent University, 2001.Thesis (Master's) -- Bilkent University, 2001.Includes bibliographical references.The purpose of this thesis is to explain “excess sensitivity” puzzle observed in consumption behavior an alternative way. By deviating from full optimization axiom, in a dynamic extension of Arthur’s stochastic decision model, it was observed that a tendency of excess consumption following temporary income shock prevails. Another main technical contribution achieved in this thesis is in modelling behavior and learning in intertemporal decision problems. In particular, an extension of Arthur’s type of behavior to dynamic situations and comparison of the corresponding values with those of Bellman’s dynamic programming solution is achieved. Moreover it was shown by using stochastic approximation theory that classifier systems learning ends up at the ‘strength’ values corresponding to the Arthur’s value function.26 leaves, graphicsEnglishinfo:eu-repo/semantics/openAccessDynamic programmingconsumptionexcess sensitivity puzzlestochastic approximation theoryclassifier systems learningvalue functionHB801 .E73 2001Consumption (Economics)--Mathematical models.Dynamic programming.Demand function (Economic theory).Stochastic control theory--Mathematical models.Equilibrium (Economics).Statistics and dynamics (Social sciences).Thesis