Consumption processes and positively homogeneous projection properties (Q1003347)

The paper introduces a general method to describe and construct consumption processes such that their stochastic money accounts are non-negative (possibly, positive and with zero total consumption at the end). The generality of the method means that at least in the case of finite spaces it can be shown that basically any meaningful consumption process can be described and constructed by it. In particular, consumption processes that possess positively homogeneous projection property are studied. The considered method itself allows one to directly describe stochastic properties of consumption processes. Numerical examples are considered for time-discrete and time-continuous account processes with finite and infinite horizons, and for applications to income drawdown and bonus theory.