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An Expository Note on Alchian-Allen Theorem When Sub-Utility Functions are Homogeneous of Degree n ą 0
[Shipping the Good Apples Out: Another Proof with A Graphical Representation]

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Saito, Tetsuya

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Abstract

This expository note shows Alchian and Allen’s conjecture–consumers purchase fine quality relatively more than coarse one– is true under some specific conditions about homogeneity, inner solution and substitutability while allowing the influence of the income effect. In the proof, to be an exposition, I emphasize graphical representations of Alchian-Allen Theorem than algebra.

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File URL: http://mpra.ub.uni-muenchen.de/6442/
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 6442.

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Date of creation: 21 Dec 2007
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Handle: RePEc:pra:mprapa:6442

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Related research
Keywords: Fixed transaction cost quality of goods Alchian-Allen Theorem change in consumption pattern

Find related papers by JEL classification:
F10 - International Economics - - Trade - - - General
D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Umbeck, John, 1980. "Shipping the Good Apples Out: Some Ambiguities in the Interpretation of "Fixed Charge"," Journal of Political Economy, University of Chicago Press, vol. 88(1), pages 199-208, February. [Downloadable!] (restricted)
  2. Gould, John P & Segall, Joel, 1969. "The Substitution Effects of Transportation Costs," Journal of Political Economy, University of Chicago Press, vol. 77(1), pages 130-37, Jan./Feb.. [Downloadable!] (restricted)
  3. 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. [Downloadable!] (restricted)
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