TITLE:
Modelling Consumer Behavior by Inverse Demand Functions
AUTHORS:
Susanne Fuchs-Seliger
KEYWORDS:
Consumer Theory; Preference Relation; Inverse Demand Functions; Duality Theory
JOURNAL NAME:
Theoretical Economics Letters,
Vol.3 No.4,
July
19,
2013
ABSTRACT: In this article a model of consumer behavior will be developed,
based on preferences on the price space reflecting the individual’s
willingness to pay for certain quantities of commodities under the supposition
that the individual is restricted to his or her income. Firms offer certain
amounts of commodities at the market and consumers react to these offers by
their willingness to pay. Existence and continuity of the inverse demand
function describing consumer’s behavior under appropriate conditions will be
shown. Furthermore, differences between a model of consumer behavior based on
preferences on the commodity space and that which is based on preferences on
the price space will be pointed out.