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/lp/emerald-publishing/the-extended-slutsky-equation-revisited-79a3nWTkG6
- Publisher
- Emerald Publishing
- Copyright
- Copyright © Emerald Group Publishing Limited
- ISSN
- 0306-8293
- DOI
- 10.1108/EUM0000000000458
- Publisher site
- See Article on Publisher Site
Abstract
This article, making standard assumptions, tests the effect thatcross price elasticity of demand has on consumer directly and producerindirectly behaviour. Two classes of utility functions are employedone is U XnYm, which is asymptotically convex and, hence,conventional another is U Xn Ym, which isnonasymptotically convex and, therefore, unconventional. As a result,the rationally intended consumer of the conventional function behavesirrationally, questioning the marginal base of the analysis of the firm.The irrationally contemplating consumer of the unconventional functionacts rationally, upholding such marginal analysis. Thus, the validity ofthe direct relation between intentions and actions is doubted.
Journal
International Journal of Social Economics – Emerald Publishing
Published: Oct 1, 1990