Utility and Demand

  • Tönu Puu
Chapter

Abstract

Demand and supply are the fundament for almost all economic reasoning. The concepts are based on the idea that utility and scarcity jointly determine the value of commodities. The idea may go back as far as to Greek antiquity and Plato who wrote about almost everything. In this Chapter we attempt to collect utility functions which are useful for global dynamic systems. Particularly, we emphasize the usefulness of Lancaster’s theory where it is not the marketed commodities that are entered in the utility functions, but their “properties” assumed to be measurable scores. This is a seldom used approach, which, however, gives us a unique possibility to model commodities that are close substitutes.

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Copyright information

© Springer International Publishing AG, part of Springer Nature 2018

Authors and Affiliations

  • Tönu Puu
    • 1
  1. 1.Centre for Regional Science (CERUM)Umeå UniversityUmeåSweden

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