A Dynamic Model of a Boundedly Rational Consumer with a Simple Least Squared Learning Mechanism

Moving from a model with a boundedly rational consumer (Naimzada and Tramontana, Journal of Analytical and Institutional Economics 25:59-94, 2008), characterized by a gradient-like decisional process in which, under particular parameters conditions, the asymptotical convergence to the optimal choice does not happen, in the present work we prove that with endogenous reactivity parameter, the consumer becomes able to learn from the past and then his consumption choice converges to the rational one. © Springer Science+Business Media, LLC. 2010.