The propensity function as formal passkey to economic action
AbstractThe purpose of the present paper is to demonstrate how the interaction of the structural axiomatic core and the behavioral propensity function produces plausible outcomes in the product market. The propensity function is a compact formal expression of random, semi-random, and deterministic behavioral assumptions. Its two components are direction and magnitude of the rate of change of an elementary axiomatic variable. A type-C propensity function is the formal container for a familiar conception that Samuelson identified as qualitative prediction. Two type-C functions are sufficient to produce stochastic stability and optimality in the product market.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 34051.
Date of creation: 11 Oct 2011
Date of revision:
New framework of concepts; Structure-centric; Axiom set; Qualitative prediction; Tendency laws; Separability; Determinism–indeterminism; Information function; Action function;
Find related papers by JEL classification:
- D03 - Microeconomics - - General - - - Behavioral Microeconomics; Underlying Principles
- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
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