If one wants to get rid of the paradoxes pointed out by Hildenbrand (1998) and B. de Villemeur (1999), one needs to reformulate Grandmont's (1992) notion of behavioral heterogeneity such as to get exact insensitivity of the aggregate budget share function with respect to changes in prices and income, instead of a mere approximate insensitivity. Here, we propose a non parametric set-up such that, if the population is distributed according to some ``uniform'' measure, the aggregate budget share function is constant. This exact insensitivity is not explained by any insensitivity property at the micro-economic level, but rather by a perfect ``balancing effect''. We then discuss the economic interpretation of some concrete examples illustrating our theory.
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Paper provided by Bureau d'Economie Théorique et Appliquée, ULP, Strasbourg in its series Working Papers of BETA with number
2002-22.
Find related papers by JEL classification: D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis D30 - Microeconomics - - Distribution - - - General D41 - Microeconomics - - Market Structure and Pricing - - - Perfect Competition D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
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