We formulate several laws of individual and market demand and describe their relationship to neoclassical demand theory. The laws have implications for comparative statics and stability of competitive equilibrium. We survey results that offer interpretable sufficient conditions for the laws to hold and we refer to related empirical evidence. The laws for market demand are more likely to be satisfied if commodities are more substitutable. Certain kinds of heterogeneity across individuals make the laws more likely to hold in the aggregate even if they are violated by individuals.
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Paper provided by University at Albany, SUNY, Department of Economics in its series Discussion Papers with number
06-07.
Length: Date of creation: 2006 Date of revision: Handle: RePEc:nya:albaec:06-07
Contact details of provider: Postal: Department of Economics, BA 110 University at Albany State University of New York Albany, NY 12222 U.S.A. Phone: (518) 442-4735 Fax: (518) 442-4736
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Hardle, Wolfgang & Hildenbrand, Werner & Jerison, Michael, 1991.
"Empirical Evidence on the Law of Demand,"
Econometrica,
Econometric Society, vol. 59(6), pages 1525-49, November.
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