On J.M. Grandmont's Modelling of Behavioral Heterogeneity
J.M. Grandmont claims in his paper "Transformations of the Commodity Space, Behavioral Heterogeneity, and the Aggregation Problem" (1992) to model "behavioral heterogeneity". By a specific parametrization he defines a subset of all demand functions and assumes that the distribution of the parameters is getting more dispersed (increasing flatness of the density function). This increasing dispersedness of the parameters is interpreted as "increasing heterogeneity" of the population of households described by the distribution of demand functions. But, due to the specific parametrization, increasing dispersedness of the parameters leads to an increasing concentration of the demand functions. Therefore, roughly speaking, Grandmont rather models increasing "behavioral similarity".
|Date of creation:||Jul 1998|
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