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Market demand: a holistic theory and its verification

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  • Gorbunov, Vladimir

Abstract

The paper presents a revision of the contemporary reductionistic demand theory, replacing the studying object, i.e. an individual, with a fuzzy collection of market buyers, regarded as a “statistical ensemble of consumers”. The new holistic market demand theory formally retains the neoclassical demand theory with reconsidering the utility function as a collective one. A nonparametric verification method is presented, which uses the economic (Konüs) and formula Fisher indexes. The method has a variational character based on the theory of ill-posed problems. Verification is carried out simultaneously with the construction of Konüs indexes. The method is demonstrated on an example of the new Giffen demand model.

Suggested Citation

  • Gorbunov, Vladimir, 2021. "Market demand: a holistic theory and its verification," MPRA Paper 109154, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:109154
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    Cited by:

    1. Gorbunov, Vladimir, 2022. "The positive resolution of the microeconomic problem of market demand: issues of methodology and verification," MPRA Paper 115514, University Library of Munich, Germany.
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    More about this item

    Keywords

    Statistical consumers’ ensemble ∙ Collective utility function ∙ Verification ∙ Ill-posed problems ∙ Konüs indexes ∙ Giffen demand;

    JEL classification:

    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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