Transformations of the Commodity Space, Behavioral Heterogeneity and the Aggregation Problem
The aggregation problem in demand analysis and exchange equilibrium is studied by putting restrictions on the shape of the distribution of the agents' characteristics. This is done by exploiting the finite dimensional linear structure induced on demand functions by affine transformations of the commodity space (or household equivalence scales). Increasing the degree of behavioral heterogeneity in the household sector or more specifically, making the conditional distributions in each equivalence class of demand functions fiat enough, has an important regularizing influence on aggregate budget shares: market demand has a negative dominant diagonal Jacobian matrix, aggregate excess demand has the gross substitutability property, on a large set of prices. These facts have strong consequences for the unicity and stability of equilibrium as well as for the prevalence of the weak axiom of revealed preference in the aggregate in a private ownership Walrasian exchange model.
|Date of creation:||Jul 1991|
|Contact details of provider:|| Postal: Yale University, Box 208281, New Haven, CT 06520-8281 USA|
Phone: (203) 432-3702
Fax: (203) 432-6167
Web page: http://cowles.yale.edu/
More information through EDIRC
|Order Information:|| Postal: Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA|
References listed on IDEAS
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.:
- Grandmont, Jean-Michel, 1987.
"Distributions of Preferences and the 'Law of Demand.',"
Econometric Society, vol. 55(1), pages 155-161, January.
- Jean-Michel Grandmont, 1984. "Distribution of Preferences and the 'Law of Demand'," Working papers 356, Massachusetts Institute of Technology (MIT), Department of Economics.
- Grandmont Jean-michel, 1985. "Distributions of preferences and the "law of demand"," CEPREMAP Working Papers (Couverture Orange) 8513, CEPREMAP.
- Gordon Tullock, 1967. "The General Irrelevance of the General Impossibility Theorem," The Quarterly Journal of Economics, Oxford University Press, vol. 81(2), pages 256-270.
- Caplin, Andrew S & Nalebuff, Barry J, 1988. "On 64%-Majority Rule," Econometrica, Econometric Society, vol. 56(4), pages 787-814, July.
- Egbert Dierker, 1989. "Competition for Customers," Discussion Paper Serie A 244, University of Bonn, Germany.
- Caplin, Andrew & Nalebuff, Barry, 1991. "Aggregation and Social Choice: A Mean Voter Theorem," Econometrica, Econometric Society, vol. 59(1), pages 1-23, January.
- Andrew Caplin & Barry Nalebuff, 1990. "Aggregation and Social Choice: A Mean Voter Theorem," Cowles Foundation Discussion Papers 938, Cowles Foundation for Research in Economics, Yale University.
- Deaton, Angus, 1986. "Demand analysis," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 3, chapter 30, pages 1767-1839 Elsevier.
- Trockel, Walter, 1989. "Classification of budget-invariant monotonic preferences," Economics Letters, Elsevier, vol. 30(1), pages 7-10.
- Sonnenschein, Hugo, 1973. "Do Walras' identity and continuity characterize the class of community excess demand functions?," Journal of Economic Theory, Elsevier, vol. 6(4), pages 345-354, August.
- Grandmont, Jean-Michel, 1978. "Intermediate Preferences and the Majority Rule," Econometrica, Econometric Society, vol. 46(2), pages 317-330, March.
- Hildenbrand, Werner, 1971. "Random preferences and equilibrium analysis," Journal of Economic Theory, Elsevier, vol. 3(4), pages 414-429, December.
- Hildegard DIERKER, 1989. "Existence of Nash Equilibrium in Pure Strategies in an Oligopoly With Price Setting Firms," Vienna Economics Papers vie8902, University of Vienna, Department of Economics.
- Dierker, Egbert & Dierker, Hildegard & Trockel, Walter, 1984. "Price-dispersed preferences and C1 mean demand," Journal of Mathematical Economics, Elsevier, vol. 13(1), pages 11-42, April.
- Hildenbrand, Werner, 1989. "Facts and ideas in microeconomic theory," European Economic Review, Elsevier, vol. 33(2-3), pages 251-276, March.
- Follmer, Hans, 1974. "Random economies with many interacting agents," Journal of Mathematical Economics, Elsevier, vol. 1(1), pages 51-62, March.
- Shafer, Wayne & Sonnenschein, Hugo, 1993. "Market demand and excess demand functions," Handbook of Mathematical Economics, in: K. J. Arrow & M.D. Intriligator (ed.), Handbook of Mathematical Economics, edition 4, volume 2, chapter 14, pages 671-693 Elsevier.
- Hildenbrand, Werner, 1983. "On the "Law of Demand."," Econometrica, Econometric Society, vol. 51(4), pages 997-1019, July.
- Muellbauer, John, 1980. "The Estimation of the Prais-Houthakker Model of Equivalence Scales," Econometrica, Econometric Society, vol. 48(1), pages 153-176, January.
- Davis, Otto A & DeGroot, Morris H & Hinich, Melvin J, 1972. "Social Preference Orderings and Majority Rule," Econometrica, Econometric Society, vol. 40(1), pages 147-157, January.
- Jorgenson, Dale W & Slesnick, Daniel T, 1987. "Aggregate Consumer Behavior and Household Equivalence Scales," Journal of Business & Economic Statistics, American Statistical Association, vol. 5(2), pages 219-232, April.
- Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, December.
- Debreu, Gerard, 1993. "Existence of competitive equilibrium," Handbook of Mathematical Economics, in: K. J. Arrow & M.D. Intriligator (ed.), Handbook of Mathematical Economics, edition 4, volume 2, chapter 15, pages 697-743 Elsevier.
- Mas-Colell, Andreu & Neuefeind, Wilhelm, 1977. "Some Generic Properties of Aggregate Excess Demand and an Application," Econometrica, Econometric Society, vol. 45(3), pages 591-599, April. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:cwl:cwldpp:987. 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: (Matthew C. Regan)
If references are entirely missing, you can add them using this form.