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Non Utility Maximizing Behaviour: Probabilistic Choice in a Budget Set “Box”. Properties of Expected Demand Functions

Author

Listed:
  • Larsson, Lars-Göran

    (Department of Economics, School of Business, Economics and Law, Göteborg University)

Abstract

In this paper we use some(even a convex) probabilistic frequency functions in two choice variables defined over the budget set” box” and calculate the expected demand to study its properties The expected demands have own price negativity , are normal goods and are homogeneous of degree zero*. The detailed properties of deterministic demand functions can be replaced with similar properties for some expected demand functions the latter found with fewer and behaviourally less restrictive assumptions. To assume a deterministic utility function to be maximized is more restrictive in a behavioural sense than assuming random choice between some boundaries.

Suggested Citation

  • Larsson, Lars-Göran, 2008. "Non Utility Maximizing Behaviour: Probabilistic Choice in a Budget Set “Box”. Properties of Expected Demand Functions," Working Papers in Economics 293, University of Gothenburg, Department of Economics.
    • Handle: RePEc:hhs:gunwpe:0293
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    File URL: http://hdl.handle.net/2077/9854
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    References listed on IDEAS

    as
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    3. Shone, R., 1975. "Microeconomics," Elsevier Monographs, Elsevier, edition 1, number 9780126413502 edited by Shell, Karl.
    4. Roger B. Myerson, 1999. "Nash Equilibrium and the History of Economic Theory," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1067-1082, September.
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    More about this item

    Keywords

    Non-maximising behaviour; Bounded rationality; Random choice; Expected demand;
    All these keywords.

    JEL classification:

    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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