Behavioral heterogeneity and structural properties of aggregate demand
(1999) Journal of Mathematical Economics —
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- Abstract
- The paper deals with aggregate demand of a large population of households. A theoretical framework is developed which does not rely on specific models of individual behavior. The approach is based on a distributional property of the population by assuming a considerable heterogeneity in the ways how different households react to changes in prices and income. Sufficient heterogeneity implies some important structural features of aggregate demand such as, for example, the Law of Demand, which cannot in general be derived from the microeconomic assumptions on individual rationality. Emphasis is placed upon a discussion of the conceptual approach. (C) 1999 Elsevier Science S.A. All rights reserved.
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Citations
Kneip, A. (1999). Behavioral heterogeneity and structural properties of aggregate demand. Journal of Mathematical Economics. https://doi.org/10.1016/S0304-4068(98)00057-3