A Theory of Random Consumer Demand
AbstractThis paper presents a new theory of random consumer demand. The primitive is a collection of probability distributions, rather than a binary preference. Various assumptions constrain these distributions, including analogues of common assumptions about preferences such as transitivity, monotonicity and convexity. Two results establish a complete representation of theoretically consistent random demand. The purpose of this theory of random consumer demand is application to empirical consumer demand problems. To this end, the theory has several desirable properties. It is intrinsically stochastic, so the econometrician can apply it directly without adding extrinsic randomness in the form of residuals. Random demand is parsimoniously represented by a single function on the consumption set. Finally, we have a practical method for statistical inference based on the theory, described in McCausland (2004), a companion paper.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Centre interuniversitaire de recherche en économie quantitative, CIREQ in its series Cahiers de recherche with number 08-2004.
Length: 31 pages
Date of creation: 2004
Date of revision:
Contact details of provider:
Postal: C.P. 6128, Succ. centre-ville, Montréal (PQ) H3C 3J7
Phone: (514) 343-6557
Fax: (514) 343-7221
Web page: http://www.cireq.umontreal.ca
More information through EDIRC
Other versions of this item:
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-08-23 (All new papers)
- NEP-DCM-2004-08-23 (Discrete Choice Models)
- NEP-MIC-2004-08-23 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bandyopadhyay, Taradas & Dasgupta, Indraneel & Pattanaik, Prasanta K., 1999. "Stochastic Revealed Preference and the Theory of Demand," Journal of Economic Theory, Elsevier, vol. 84(1), pages 95-110, January.
- Barbera, Salvador & Pattanaik, Prasanta K, 1986. "Falmagne and the Rationalizability of Stochastic Choices in Terms of Random Orderings," Econometrica, Econometric Society, vol. 54(3), pages 707-15, May.
- McFadden, Daniel, 1974. "The measurement of urban travel demand," Journal of Public Economics, Elsevier, vol. 3(4), pages 303-328, November.
- Gerard Debreu, 1957. "Stochastic Choice and Cardinal Utility," Cowles Foundation Discussion Papers 39, Cowles Foundation for Research in Economics, Yale University.
- Sattath, Shmuel & Tversky, Amos, 1976. "Unite and Conquer: A Multiplicative Inequality for Choice Probabilities," Econometrica, Econometric Society, vol. 44(1), pages 79-89, January.
- Amemiya, Takeshi, 1981. "Qualitative Response Models: A Survey," Journal of Economic Literature, American Economic Association, vol. 19(4), pages 1483-1536, December.
- Varian, Hal R., 1990. "Goodness-of-fit in optimizing models," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 125-140.
- McCausland, William J., 2008. "On Bayesian analysis and computation for functions with monotonicity and curvature restrictions," Journal of Econometrics, Elsevier, vol. 142(1), pages 484-507, January.
- McCAUSLAND, William, 2004.
"Bayesian Analysis for a Theory of Random Consumer Demand: The Case of Indivisible Goods,"
Cahiers de recherche
2004-05, Universite de Montreal, Departement de sciences economiques.
- McCAUSLAND, William J., 2004. "Bayesian Analysis for a Theory of Random Consumer Demand: The Case of Indivisible Goods," Cahiers de recherche 10-2004, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- WILLIAM J. McCAUSLAND, 2009. "Random Consumer Demand," Economica, London School of Economics and Political Science, vol. 76(301), pages 89-107, 02.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sharon BREWER).
If references are entirely missing, you can add them using this form.