I am thinking about the first of the month. I spend more of my money on superior goods and, because of that decision, less on normal and inferior goods. Are income and substitution effects enough to explain this or not?
I am thinking about a hypothesis for why people change their types of goods given that budgets change according to pre-decisions.
I will not misguide you: this is not only a goods decision or money constraint; it is also related to the time constraint and time-involved work.
For example, an agent has a given time constraint, T, to work on his given projects over a time period, t, which requires only T-r amounts of time for the period t+1. Hence he spends the time r to do other things according to opportunity cost theory. Therefore, he spends his time working on this project only at amounts equivalent to T-r and the opportunity cost of this project decreases as time approaches t+1.
So at this point, if he is an expert at this job, everything will go smoothly but, if not, this is a false prediction and the agent has to face his false decision and survive on his present condition. The hypothesis starts here: 1. Will he increase his purchasing power (i.e., sleep less to increase the time constraint)? 2. Will he bargain with his boss to increase his time constraint? Why?