Corvinus
Corvinus

Which rationing rule does a single consumer follow?

Tasnádi, Attila (1998) Which rationing rule does a single consumer follow? In: The future in the present - changing society, new scientific issues : Papers presented at the Ph.D. students' first international conference. BKE Posztgraduális Kar , Budapest, pp. 187-200. .

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Abstract

We will investigate the amount of residual demand in a market consisting of only one consumer and two producers. Since there is only one consumer, we cannot really speak about a rationing rule, but we can ask ourselves whether a known rationing rule reflects the consumer’s utility maximizing behavior. We will show that, if the consumer has a Cobb-Douglas utility function, then the amount purchased by the consumer from the high-price firm lies between the values determined according to the efficient rationing rule and the random rationing rule. We will show further, that if the consumer has a quasilinear utility function, then in the economically interesting case his residual demand function will be equal to the residual demand function under efficient rationing.

Item Type:Book Section
Subjects:Mathematics, Econometrics
ID Code:297
Deposited By: Ádám Hoffmann
Deposited On:08 Mar 2011 11:34
Last Modified:03 Jul 2012 00:24

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