Instruct: Identify the main and secondary category of Arxiv papers based on the titles and abstracts
Query: Optimal consumption with loss aversion and reference to past spending
  maximum   This paper studies an optimal consumption problem for a loss-averse agent
with reference to past consumption maximum. To account for loss aversion on
relative consumption, an S-shaped utility is adopted that measures the
difference between the non-negative consumption rate and a fraction of the
historical spending peak. We consider the concave envelope of the realization
utility with respect to consumption, allowing us to focus on an auxiliary HJB
variational inequality on the strength of concavification principle and dynamic
programming arguments. By applying the dual transform and smooth-fit
conditions, the auxiliary HJB variational inequality is solved in closed-form
piecewisely and some thresholds of the wealth variable are obtained. The
optimal consumption and investment control of the original problem can be
derived analytically in the piecewise feedback form. The rigorous verification
proofs on optimality and concavification principle are provided. Some numerical
sensitivity analysis and financial implications are also presented.

34
The categories of this paper are: chem-ph
12
The categories of this paper are: nucl-th
6
The categories of this paper are: astro-ph
35
The categories of this paper are: mtrl-th
22
The categories of this paper are: chao-dyn
29
The categories of this paper are: funct-an
33
The categories of this paper are: plasm-ph
16
The categories of this paper are: stat
24
The categories of this paper are: dg-ga
11
The categories of this paper are: hep-lat
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The categories of this paper are: supr-con
8
The categories of this paper are: hep-ex
32
The categories of this paper are: atom-ph
28
The categories of this paper are: alg-geom
18
The categories of this paper are: econ
19
The categories of this paper are: eess