Market demand: a holistic theory and its verification

Gorbunov, Vladimir (2021): Market demand: a holistic theory and its verification.

Abstract

The paper presents a revision of the contemporary reductionistic demand theory, replacing the studying object, i.e. an individual, with a fuzzy collection of market buyers, regarded as a “statistical ensemble of consumers”. The new holistic market demand theory formally retains the neoclassical demand theory with reconsidering the utility function as a collective one. A nonparametric verification method is presented, which uses the economic (Konüs) and formula Fisher indexes. The method has a variational character based on the theory of ill-posed problems. Verification is carried out simultaneously with the construction of Konüs indexes. The method is demonstrated on an example of the new Giffen demand model.

• Item Type: MPRA Paper
• Language: English
• Keywords: Statistical consumers’ ensemble ∙ Collective utility function ∙ Verification ∙ Ill-posed problems ∙ Konüs indexes ∙ Giffen demand
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C18 - Methodological Issues: General; C - Mathematical and Quantitative Methods > C4 - Econometric and Statistical Methods: Special Topics > C43 - Index Numbers and Aggregation; C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C61 - Optimization Techniques ; Programming Models ; Dynamic Analysis; D - Microeconomics > D1 - Household Behavior and Family Economics > D11 - Consumer Economics: Theory; D - Microeconomics > D1 - Household Behavior and Family Economics > D12 - Consumer Economics: Empirical Analysis

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