Shipping the Good Apples Out: Another Proof with A Graphical Representation
AbstractThis paper provides a proof of Alchian and Allen’s thesis—superior good is relatively more consumed in distant market—with some restrictions on the utility function. Comparing to the proof by Borcherding and Silberberg (1978), those assumptions may restrict the model in some sense but we will find the Alchian-Allen theorem is independent of the third law of Hicks (Hicks 1946, pp. 309-311). The theorem is given by natural characteristics of relative demand curves.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 1297.
Date of creation: 01 Jan 2007
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Fixed transportation cost; quality of goods; relative demand; Alchian-Allen theorem;
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- repec:cup:jechis:v:61:y:2002:i:03:p:777-798_03 is not listed on IDEAS
- Borcherding, Thomas E & Silberberg, Eugene, 1978. "Shipping the Good Apples Out: The Alchian and Allen Theorem Reconsidered," Journal of Political Economy, University of Chicago Press, vol. 86(1), pages 131-38, February.
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