# Model of adaptive behavior of households

## Sergei Guriev and Margarita Shakhova

### Computing Center, Russian Academy of Science

We consider model of adaptation of pure time preference in the
closed economy with three assets and non-uniform households. We
were studying that the households are trying to imitate the currently
optimal one. Such adaptive behavior leads to the convergence of
the pure time preference rates and wealth redistribution. We have
shown that the system possesses the equifinality property: regardless
on the criterion of the determination of the most prosperous household
the final distribution is defined solely by the value of *R_i=w_i
exp{-delta_i T/beta} *in the initial distribution of welath
*w_i *and time prefernce rates *delta_i*. The criterion
*R_i* shows the existing relationship between wealth and
pure time preference rate. The higher delta is the more wealth
is required to ensure the high consumption level in future. The
higher the beta is the less wealth *w* is required to compensate
too high level of the pure time preference.

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