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dc.contributor.authorAmir, Rabah
dc.contributor.authorErickson, Philip
dc.contributor.authorJin, Jim
dc.date.accessioned2018-09-26T23:45:43Z
dc.date.available2018-09-26T23:45:43Z
dc.date.issued2017-05
dc.identifier249489274
dc.identifier4dc90d71-bbc2-43ed-b667-334ad9278cfa
dc.identifier85016029931
dc.identifier000401394800025
dc.identifier.citationAmir , R , Erickson , P & Jin , J 2017 , ' On the microeconomic foundations of linear demand for differentiated products ' , Journal of Economic Theory , vol. 169 , pp. 641-665 . https://doi.org/10.1016/j.jet.2017.03.005en
dc.identifier.issn0022-0531
dc.identifier.otherRIS: urn:321924068577C4010C29B24570107776
dc.identifier.urihttps://hdl.handle.net/10023/16080
dc.description.abstractThis paper provides a thorough exploration of the microeconomic foundations for the multi-variate linear demand function for differentiated products, which is widely used in industrial organization. The setting is the standard representative consumer with a quasi-linear utility function. A key finding is that strict concavity of the quadratic utility function is critical for the demand system to be well defined. Otherwise, the true demand function may be quite complex: Multi-valued, non-linear and income-dependent. We uncover failures of duality relationships between substitute products and complementary products, as well as the incompatibility between high levels of complementarity and concavity. The two-good case emerges as a special case with strong but non-robust properties. A key implication is that all conclusions derived in applied economic models via the use of linear demand that does not satisfy the Law of Demand ought to be regarded with some suspicion.
dc.format.extent425354
dc.language.isoeng
dc.relation.ispartofJournal of Economic Theoryen
dc.subjectLinear demanden
dc.subjectGross substitutesen
dc.subjectGross complementsen
dc.subjectEdgeworth complementsen
dc.subjectRepresentative consumeren
dc.subjectLaw of Demanden
dc.subjectHB Economic Theoryen
dc.subjectT-NDASen
dc.subjectBDCen
dc.subjectR2Cen
dc.subject.lccHBen
dc.titleOn the microeconomic foundations of linear demand for differentiated productsen
dc.typeJournal articleen
dc.contributor.institutionUniversity of St Andrews. School of Economics and Financeen
dc.identifier.doi10.1016/j.jet.2017.03.005
dc.description.statusPeer revieweden
dc.date.embargoedUntil2018-09-27


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