IDEAS home Printed from https://ideas.repec.org/p/ucr/wpaper/201507.html
   My bibliography  Save this paper

Dynamic Model of the Individual Consumer

Author

Listed:
  • Craig McLaren

    () (Department of Economics, University of California Riverside)

Abstract

This paper presents an alternate formulation of consumer theory that allows the consumer to be modeled as acquiring his/her goods dynamically, i.e. through a series of incremental decisions based on the outcomes of their predecessors. The model begins with the assumption that the consumer knows his /her Marginal Rates of Substitution (MRS), and defines a utility-like quantity in terms of their integral. The model is developed using the mathematics of vector analysis, which clarifies the intuition of what such integrals mean and provides a simple and useful means of expressing the convexity of indifference surfaces. A concept of marginal demand is introduced to capture the difference in the mix of goods a consumer would procure, were he/she to acquire them incrementally rather than through a single, utility maximizing decision

Suggested Citation

  • Craig McLaren, 2015. "Dynamic Model of the Individual Consumer," Working Papers 201507, University of California at Riverside, Department of Economics.
  • Handle: RePEc:ucr:wpaper:201507
    as

    Download full text from publisher

    File URL: https://economics.ucr.edu/repec/ucr/wpaper/201507.pdf
    File Function: First version, 2015
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Craig McLaren, 2015. "Existence and Stability of Dynamic Exchange Equilibria," Working Papers 201508, University of California at Riverside, Department of Economics.

    More about this item

    Keywords

    Dynamic Consumer Theory; Integrability; Convex Indifference Surface; Engle’s Law; Antonelli Conditions; Marginal Demand; Willingness to Pay; Contingent Valuation; Vector Analysis;

    JEL classification:

    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucr:wpaper:201507. 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: (Kelvin Mac). General contact details of provider: http://edirc.repec.org/data/deucrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.