The Law of Demand and Risk Aversion
AbstractThis note proposes a necessary and sufficient condition on a preference to guarantee that the demand function it generates satisfies the law of demand. It shows that the law of demand may be succinctly characterized by differences in an agents level of risk aversion when she is confronted with different lotteries composed of commodity bundles.
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Bibliographic InfoPaper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 2002-W03.
Date of creation: 01 Jan 2002
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law of demand; monotonicity; preference; risk aversion;
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