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The positive resolution of the microeconomic problem of market demand: issues of methodology and verification

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  • Gorbunov, Vladimir

Abstract

The problem of consumer demand in modern (micro)economic theory is that this theory contains a normative theory of individual demand, but does not contain a positive theory of market demand – an object of real interest for economists-practitioners and governments. This failure has led to failures in equilibrium theory and applied demand analysis. The article presents a methodological analysis of this demand problem, created within the framework of general scientific methodology and with rejection of the individual demand theory. The studying object of this theory, is a fuzzy set of market buyers regarded as a holistic object and called the ‘statistical ensemble of consumers.’ This theory formally retains the individual demand theory, but it is a positive theory verifiable by trade statistics. The verification method of the theory is a development of the Afriat-Varian non-parametric one with the simultaneous calculation of economic indexes reflecting the population preferences.

Suggested Citation

  • Gorbunov, Vladimir, 2022. "The positive resolution of the microeconomic problem of market demand: issues of methodology and verification," MPRA Paper 115514, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:115514
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    References listed on IDEAS

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    More about this item

    Keywords

    market demand problem; methodological analysis; statistical ensemble of consumers; verification; Konüs indexes;
    All these keywords.

    JEL classification:

    • B59 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Other
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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