Munich Personal RePEc Archive

A Behavioural Approach to Kinked Demand Curves

Stavros, Drakopoulos (1992): A Behavioural Approach to Kinked Demand Curves. Published in: The Cyprus Journal of Economics , Vol. 5, No. 1 (June 1992): pp. 1-14.

[img] PDF

Download (655kB)


The starting point of this paper is the significance for economic theory of the introduction of threshold sensitive behavior which is better known in psychology as the Weber-Fechner Law. It is shown that the incorporation of this Law can give an individual multi-kinked demand curve which can be approximated as a market demand curve of the Sweezy type. In terms of macroeconomic significance, the Law can be connected to income policies, saving behavior and expectations in the money markets.

MPRA is a RePEc service hosted by
the Munich University Library in Germany.