The positive resolution of the microeconomic problem of market demand: issues of methodology and verification

Gorbunov, Vladimir (2022): The positive resolution of the microeconomic problem of market demand: issues of methodology and verification.

Abstract

The problem of consumer demand in modern (micro)economic theory is that this theory contains a normative theory of individual demand, but does not contain a positive theory of market demand – an object of real interest for economists-practitioners and governments. This failure has led to failures in equilibrium theory and applied demand analysis. The article presents a methodological analysis of this demand problem, created within the framework of general scientific methodology and with rejection of the individual demand theory. The studying object of this theory, is a fuzzy set of market buyers regarded as a holistic object and called the ‘statistical ensemble of consumers.’ This theory formally retains the individual demand theory, but it is a positive theory verifiable by trade statistics. The verification method of the theory is a development of the Afriat-Varian non-parametric one with the simultaneous calculation of economic indexes reflecting the population preferences.

• Item Type: MPRA Paper
• Language: English
• Keywords: market demand problem; methodological analysis; statistical ensemble of consumers; verification; Konüs indexes
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B59 - Other; C - Mathematical and Quantitative Methods > C4 - Econometric and Statistical Methods: Special Topics > C43 - Index Numbers and Aggregation; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C51 - Model Construction and Estimation; D - Microeconomics > D1 - Household Behavior and Family Economics > D11 - Consumer Economics: Theory

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