Please use this identifier to cite or link to this item:
http://hdl.handle.net/1893/33704
Appears in Collections: | Economics Working Papers |
Title: | Preference Conditions for Linear Demand Functions |
Author(s): | Diasakos, Theodoros M |
Contact Email: | theodoros.diasakos@stir.ac.uk |
Citation: | Diasakos TM (2021) Preference Conditions for Linear Demand Functions. Working Paper Series. |
Keywords: | Linear demand preference differentiability strict convexity strict monotonicity law of demand |
JEL Code(s): | C02: Mathematical Methods D01: Microeconomic Behavior: Underlying Principles D11: Consumer Economics: Theory |
Issue Date: | 29-Nov-2021 |
Date Deposited: | 29-Nov-2021 |
Abstract: | The present study takes consumer preferences as the primitive and a most general formulation of a linear demand system as the desideratum. To investigate how the two are related, I take a novel approach to demand integrability that relies on some recent results in Diasakos and Gerasimou (2020). The methodology applies for either of the two possible price-normalization regimes (with respect to the price of a numeraire commodity or income); in either case, it leads to a complete characterization of linear demand systems in terms of the properties for the underlying rationalizing preference relation, and analytical solutions for the corresponding (direct) utility function. My results provide a proper microfoundation for linear demand systems-in a way that addresses knowledge gaps in the extant literature on linear demand that leave space for fundamental misunderstanding. JEL Classifications: C02, D01, D11 An earlier version was presented at a session of the 20th annual SAET conference; I wish to thank the participants for helpful comments. |
Type: | Working Paper |
URI: | http://hdl.handle.net/1893/33704 |
Rights: | Author retains copyright. Proper attribution of authorship and correct citation details should be given. |
Affiliation: | Economics |
Licence URL(s): | https://storre.stir.ac.uk/STORREEndUserLicence.pdf |
Files in This Item:
File | Description | Size | Format | |
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Linear_Demand.pdf | Fulltext - Published Version | 231.43 kB | Adobe PDF | View/Open |
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