The Law of Demand and Risk Aversion
This note proposes a necessary and sufficient condition on a preference to guarantee that the demand function it generates satisfies the law of demand. It shows that the law of demand may be succinctly characterized by differences in an agent's level of risk aversion when she is confronted with different lotteries composed of commodity bundles.
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- John K.-H. Quah, 2000. "The Weak Axiom and Comparative Statics," Econometric Society World Congress 2000 Contributed Papers 0437, Econometric Society.
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"The Theory of General Economic Equilibrium,"
Cambridge University Press, number 9780521265140, October.
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