The New Palgrave Dictionary of Economics

Living Edition
| Editors: Palgrave Macmillan

Integrability of Demand

  • Donald W. Katzner
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DOI: https://doi.org/10.1057/978-1-349-95121-5_1100-1
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Abstract

The lines of reasoning linking individual (ordinal) utility functions (or preference orderings) to individual demand functions run in both directions. Progressions from the former to the latter often begin with assumptions about the characteristics of a consumer’s utility function and the requirement that he always chooses so as to maximize utility subject to a budget constraint, and then go on to derive the demand functions and the properties of these demand functions that logically ensue from such premises. Depending on context, certain of the properties of the demand functions so derived are expressed in differential terms (i.e., symmetry and negative definiteness of matrices of Slutsky substitution functions) or in revealed preference form. The reverse course takes the individual’s demand functions and their properties as given and reconstructs a utility function from which, upon constrained maximization, the original demand functions could have been generated. In this second case, when the starting point includes the differential rather than revealed preference properties of demand, the argument usually involves (in part) the integration of a system of one or more differential equations. Hence the name ‘integrability of demand’ affixed to it.

Keywords

Utility Function Budget Constraint Demand Function Differential Equation System Commodity Space 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
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Copyright information

© The Author(s) 1987

Authors and Affiliations

  • Donald W. Katzner
    • 1
  1. 1.