Some Anomalies Arising from Bandwagons that Impart Upward-Sloping Segments to Market Demand
AbstractIn Gary Becker’s (1991) theory of bandwagon effects, a portion of market demand is positively sloped. In this, he ignores Harvey Leibenstein’s (1950) hypothesis that market demands for bandwagon goods are everywhere negatively sloped (stemming from scarcity imposed constraints). A substantial literature now invokes Becker’s bandwagon, also ignoring Leibenstein. Two anomalies attend Becker’s bandwagon demand when it slopes upward: 1) straightforward parameterizations are inconsistent with the economic requirement that quantities demanded be non-negative; 2) regardless of parameterization, the comparative statics of Becker’s demand carry unworldly implications.
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Bibliographic InfoPaper provided by Ball State University, Department of Economics in its series Working Papers with number 200804.
Length: 17 pages
Date of creation: Dec 2008
Date of revision: Dec 2008
Bandwagon Effect; Law of Demand;
Other versions of this item:
- Micha Gisser & James E. McClure & Giray Okten & Gary Santoni, 2009. "Some Anomalies Arising from Bandwagons that Impart Upward Sloping Segments to Market Demand," Econ Journal Watch, Econ Journal Watch, vol. 6(1), pages 21-34, January.
- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
- D40 - Microeconomics - - Market Structure and Pricing - - - General
- D62 - Microeconomics - - Welfare Economics - - - Externalities
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-01-17 (All new papers)
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