Random Consumer Demand
I present a theory of random consumer demand. The primitive is a collection of probability distributions on budgets. Axioms constrain these distributions, including analogues of preference axioms, such as transitivity, monotonicity and convexity. Results establish a complete representation of theoretically consistent demand. The theory's purpose is empirical application. To this end, the theory has desirable properties. Intrinsically stochastic, econometricians can apply it without adding extrinsic randomness in the form of errors. Random demand is parsimoniously represented by a single function on the consumption set. Finally, there exist practical methods for inference based on the theory, described in a companion paper. Copyright (c) The London School of Economics and Political Science 2008.
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Volume (Year): 76 (2009)
Issue (Month): 301 (02)
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References listed on IDEAS
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- Bandyopadhyay, Taradas & Bandyopadhyay, Bandyopadhyay & Pattanaik, Prasanta K., 2002. "Demand Aggregation and the Weak Axiom of Stochastic Revealed Preference," Journal of Economic Theory, Elsevier, vol. 107(2), pages 483-489, December.
- Taradas Bandyopadhyay & Indraneel Dasgupta & Prasanta Pattanaik, 2004. "A general revealed preference theorem for stochastic demand behavior," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 23(3), pages 589-599, March.
- McCAUSLAND, William, 2004.
"A Theory of Random Consumer Demand,"
Cahiers de recherche
2004-04, Universite de Montreal, Departement de sciences economiques.
- McCAUSLAND, William J., 2004. "A Theory of Random Consumer Demand," Cahiers de recherche 08-2004, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Bandyopadhyay, Taradas & Dasgupta, Indraneel & Pattanaik, Prasanta K., 1999. "Stochastic Revealed Preference and the Theory of Demand," Journal of Economic Theory, Elsevier, vol. 84(1), pages 95-110, January.
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