Please use this identifier to cite or link to this item:
http://hdl.handle.net/1893/32932
Appears in Collections: | Economics Working Papers |
Title: | Preference Conditions for Invertible Demand Functions |
Author(s): | Diasakos, Theodoros M Gerasimou, Georgios |
Contact Email: | theodoros.diasakos@stir.ac.uk |
Citation: | Diasakos TM & Gerasimou G (2020) Preference Conditions for Invertible Demand Functions. School of Economics and Finance Discussion Papers, 1708. https://www.st-andrews.ac.uk/~wwwecon/repecfiles/4/1708.pdf |
Issue Date: | 20-Aug-2020 |
Date Deposited: | 30-Sep-2020 |
Series/Report no.: | School of Economics and Finance Discussion Papers, 1708 |
Abstract: | It is frequently assumed in several domains of economics that demand functions are invertible in prices. At the primitive level of preferences, however, the corresponding characterization has remained elusive. We identify necessary and sufficient conditions on a utility-maximizing consumer's preferences for her demand function to be continuous and invertible: strict convexity, strict monotonicity and differentiability in the sense of Rubinstein (2006). We further show that Rubinstein differentiability is equivalent to the indifference sets being smooth, which is weaker than Debreu's (1972) notion of preference smoothness. We finally discuss implications of our analysis for demand functions that satisfy the "strict law of demand". |
Type: | Working Paper |
URI: | http://hdl.handle.net/1893/32932 |
URL: | https://www.st-andrews.ac.uk/~wwwecon/repecfiles/4/1708.pdf |
Rights: | Authors retain copyright. Proper attribution of authorship and correct citation details should be given. |
Affiliation: | Economics University of St Andrews |
Licence URL(s): | https://storre.stir.ac.uk/STORREEndUserLicence.pdf |
Files in This Item:
File | Description | Size | Format | |
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Demand_2nd_revision_merged.pdf | Fulltext - Accepted Version | 457.9 kB | Adobe PDF | View/Open |
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