Market Demand (original) (raw)

Smoothing demand by aggregation

We sugges! in this paper to treat the problem of smoothing demand by aggregation in a two-step procedure, corresponding to the two different constituents of consumption characteristics. wealth and preferences. Instead of imposing a manifold structure on preferences we exploit the nice structure of wealth-space. The first step of this procedure, aggregation with respect to wealth. is carried out. It is shown th!at, for any preference, aggregation with respect to wealth yields a mean demand which is almost everywhere Ct. Moreover, it is shown that for an important class of preferences, vanishing Gaussian curvature of indifference surfaces does not destroy differentiab!!ity of the mean demand function.

∗ In addition to participants at numerous seminars and conferences, we thank

1998

We study good-by-good deviations from the Law-of-One-Price for over 1,800 re-tail goods and services between all European Union (EU) countries for the years 1975, 1980, 1985 and 1990. We find that for each of these years, after we control for differences in income and value-added tax rates, there are roughly as many overpriced goods as there are underpriced goods between any two EU countries. We also find that good-by-good measures of cross-sectional price dispersion are negatively related to the tradeability of the good, and positively related to the share of non-traded inputs required to produce the good. We argue that these observations are consistent with a model in which retail goods are produced by combining a traded input with a non-traded input. 2 1

Smoothing demand by aggregation with respect to wealth

Journal of Mathematical Economics, 1980

We suggest in this paper to treat the problem of smoothing demand by aggregation in a two-step procedure, corresponding to the two different constituents of consumption characteristics, wealth and preferences. Instead of imposing a manifold structure on preferences we exploit the nice structure of wealth-space. The first step of this procedure, aggregation with respect to wealth, is carried out. It is shown that, for any preference, aggregation with respect to wealth yields a mean demand which is almost everywhere C 1. Moreover, it is shown that for an important class of preferences, vanishing Gaussian curvature of indifference surfaces does not destroy differentiability of the mean demand function.

Homothetic or Cobb-Douglas Behavior Through Aggregation

Contributions in Theoretical Economics, 2003

A common theme in the theory of demand aggregation is that market demand can acquire properties which are not always individually present among the agents who make up that market, a phenomenon we call heteroiosis in this paper. This paper focusses on the well known result that with a suitable distribution of demand behavior (arising perhaps from the underlying distribution of preferences), market demand can become an approximately linear function of income or even take on approximately Cobb-Douglas properties. We highlight the mathematical arguments underpinning these models and show that in the right context, it is possible to carry the arguments further and achieve exact, rather than just approximate, results: exact Cobb-Douglas market demand or exact linearity of market demand with respect to income.

R. Shone - Microeconomics A Modern Treatment

Contents 3.5 Convex Sets, Convex/Concave and Quasiconvex/Quasiconcave Functions 3.5 (i) Convex Sets 3.5 (ii) Convex and Concave Functions 3.5 (iii) Quasiconcave and Quasiconvex Functions 3.6 The Axiom of Convexity 3.7 The Utility Function 3.8 Some Deductions from Neoclassical Utility Theory 3.9 Separability of the Utility Function and Some Extensions 3.10 Revealed Preference Theory CHAPTER 4 NEOCLASSICAL AND MODERN CONSUMER CHOICE COMPARED 4.1 Neoclassical Optimisation 4.2 Restrictions on the Demand Equations 4.2 (i) Aggregation Restrictions 4.2 (ii) Symmetry 4.2 (iii) Homogeneity 4.2 (iv) Negativity 4.3 Compensated Demand Curves 4.4 Groups of Commodities 4.5 Prices in the Utility Function 4.6 The Kuhn-Tucker Conditions for an Optimal Solution~ 4. 7 Neoclassical Optimisation Reconsidered 4.8 A New Look at Consumer Optimality 4.9 The Generalised Substitution Theorem 4.10 Revealed Preference Theory Revisited APPENDIX 4A THE KUHN-TUCKER THEOREMS

Trends in Mathematical Economics

2016

The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use.