Is Giffen behaviour compatible with the axioms of consumer theory?

Moffatt, Peter G.

doi:10.1016/s0304-4068(02)00033-2

Cited by 26 publications

(10 citation statements)

References 10 publications

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“…Theoretical interests lay in specifying utility functions which gave rise to Giffen behavior. Such examples were submitted, e.g., by Wold (1948), Vandermeulen (1972), Spiegel (1994), Moffatt (2002), and Doi et al (2009).…”

Section: Graphical Representationsmentioning

confidence: 99%

Slutsky Revisited: A New Decomposition of the Price Effect

Sasakura

2016

Ital Econ J

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It is only the Slutsky equation that has been universally used to examine how the demand for a good responds to variations in its own price. This paper proposes an alternative to the Slutsky equation. It decomposes such a price effect into the "ratio effect" and the "unit-elasticity effect". The "ratio effect" is positive (negative) if the expenditure spent on a good under consideration increases (decreases) when its own price rises, and it can be divided further into the familiar substitution effect and the "transfer effect" which reflects the income effect of other goods. The "unit-elasticity effect," which is always negative, stands for unitary price elasticity of demand. It is also shown that the new method can be used for the analysis of the cross-price effect with and without initial endowments. The Slutsky equation and the new one are "complements", but graphical representations as well as examples of the applications reveal that the latter is much easier to understand intuitively.

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Section: Graphical Representationsmentioning

confidence: 99%

Slutsky Revisited: A New Decomposition of the Price Effect

Sasakura

2016

Ital Econ J

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“…10. A procedure that can be used to turn such discontinuous utility functions into continuous ones is presented by Moffatt (2002).…”

Section: Figurementioning

confidence: 99%

Asymmetric Substitutability: Theory and Some Applications

Jaegher

2009

Economic Inquiry

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"Economists usually describe goods as being either (gross) complements or (gross) substitutes. Yet, what is less known is that one good may be a gross substitute for a second good, while the second good is a gross complement to the first good. This article develops a theory of asymmetric gross substitutability and suggests some potential examples and applications." ("JEL" D11) Copyright (c) 2008 Western Economic Association International.

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“…A number of authors have sought to meet the above challenge at varying levels of completeness, e.g. Moffatt (2002), Sørenson (2007) and Doi et al (2009).…”

Section: Introductionmentioning

confidence: 99%

Giffen Goods and their Reflexion Property

Moffatt¹,

Moffatt

2013

The Manchester School

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The following ‘reflexion property’ of Giffen behaviour is proved: the two‐good direct utility function (DUF) obtained by reversing the sign of two‐good indirect utility function (IUF) displays Giffen behaviour with respect to one of the two goods if and only if the IUF itself displays Giffen behaviour with respect to the other good. A particular IUF showing Giffen behaviour for both goods (in non‐overlapping regions of the price space) is constructed and the reflexion property is verified. The example IUF is extended to more than two goods, and Giffenity is verified in this case.

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Is Giffen behaviour compatible with the axioms of consumer theory?

Cited by 26 publications

References 10 publications

Slutsky Revisited: A New Decomposition of the Price Effect

Slutsky Revisited: A New Decomposition of the Price Effect

Asymmetric Substitutability: Theory and Some Applications

Giffen Goods and their Reflexion Property

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