IDEAS home Printed from https://ideas.repec.org/a/taf/eujhet/v17y2010i2p313-343.html
   My bibliography  Save this article

Stabilizing consumer choice: the role of 'true dynamic stability' and related concepts in the history of consumer choice theory

Author

Listed:
  • D. Wade Hands

Abstract

It is often argued that the inability of Arrow-Debreu general equilibrium theory to produce an adequate proof of the stability of the Walrasian price adjustment mechanism was one of the program's most significant failures. This paper will not question this standard interpretation of the history of general equilibrium theory, but makes the case that characterizing the 'stability' question in terms of market stability- in particular the stability of the equilibrium price vector in the Walrasian general equilibrium model - actually helped to stabilize the standard model of consumer choice in general equilibrium theory and elsewhere within microeconomics. The problem of the stability of 'consumer's equilibrium' was much discussed early in the twentieth century, and it has recently re-emerged in a different guise as the 'endowment effects' and 'reference dependencies' of contemporary behavioral economics, and yet it disappeared from mainstream discussion during the period 1950 to 1980. This paper argues that shifting the discussion from the intra-agent stability of the individual consumer to the inter-agent stability of the competitive market contributed - despite its ultimately negative impact on general equilibrium theory - to the long period of stable normal science consumer choice theory enjoyed during the middle of the twentieth century.

Suggested Citation

  • D. Wade Hands, 2010. "Stabilizing consumer choice: the role of 'true dynamic stability' and related concepts in the history of consumer choice theory," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 17(2), pages 313-343.
  • Handle: RePEc:taf:eujhet:v:17:y:2010:i:2:p:313-343
    DOI: 10.1080/09672560903204585
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/09672560903204585
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. D. Wade Hands, 2012. "The Rise and Fall of Walrasian Microeconomics: The Keynesian Effect," Chapters,in: Microfoundations Reconsidered, chapter 3 Edward Elgar Publishing.
    2. repec:got:cegedp:127 is not listed on IDEAS
    3. Marcel Boumans & Matthias Klaes (ed.), 2013. "Mark Blaug: Rebel with Many Causes," Books, Edward Elgar Publishing, number 15224.
    4. Schüder, Stefan, 2011. "Monetary policy trade-offs in a portfolio model with endogenous asset supply," Center for European, Governance and Economic Development Research Discussion Papers 127, University of Goettingen, Department of Economics.
    5. Schüder, Stefan, 2011. "Monetary policy trade-offs in a portfolio model with endogenous asset supply," MPRA Paper 32019, University Library of Munich, Germany.
    6. D Wade Hands, 2013. "GP08 is the New F53: Gul and Pesendorfer’s Methodological Essay from the Viewpoint of Blaug’s Popperian Methodology," Chapters,in: Mark Blaug: Rebel with Many Causes, chapter 17, pages 245-266 Edward Elgar Publishing.
    7. Stefan Schueder, 2011. "Monetary Policy Trade-Offs in a Portfolio Model with Endogenous Asset Supply," Working Papers 2011.3, International Network for Economic Research - INFER.
    8. Schüder, Stefan, 2014. "Expansive monetary policy in a portfolio model with endogenous asset supply," Economic Modelling, Elsevier, vol. 41(C), pages 239-252.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:eujhet:v:17:y:2010:i:2:p:313-343. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: http://www.tandfonline.com/REJH20 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.