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Law of Demand

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  • Michael Jerison
  • John K.-H. Quah

Abstract

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.

Suggested Citation

  • Michael Jerison & John K.-H. Quah, 2006. "Law of Demand," Discussion Papers 06-07, University at Albany, SUNY, Department of Economics.
    • Handle: RePEc:nya:albaec:06-07
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    File URL: http://www.albany.edu/economics/research/workingp/2006/lawofdemand.pdf
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    References listed on IDEAS

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    1. Jerison, Michael, 1999. "Dispersed excess demands, the weak axiom and uniqueness of equilibrium," Journal of Mathematical Economics, Elsevier, vol. 31(1), pages 15-48, February.
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    Cited by:

    1. Mackowiak, Piotr, 2010. "The existence of equilibrium without fixed-point arguments," Journal of Mathematical Economics, Elsevier, vol. 46(6), pages 1194-1199, November.
    2. Robert R. Routledge, 2009. "Testable implications of the Bertrand model," Economics Discussion Paper Series 0918, Economics, The University of Manchester.
    3. Junichi Minagawa & Thorsten Upmann, 2019. "Price Effects on Compound Commodities," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(2), pages 630-646, April.
    4. Quah, John K.-H., 2008. "The existence of equilibrium when excess demand obeys the weak axiom," Journal of Mathematical Economics, Elsevier, vol. 44(3-4), pages 337-343, February.

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