We propose a consistent utility-based framework to jointly explain a household's decisions on purchase incidence, brand choice and purchase quantity. The approach differs from other approaches, currently available in the literature, as it is able to take into account consumption dynamics. In the...

The current study points out that the derivation of the aggregate demand curve based on theory of consumer behavior has a fundamental flaw, from which the Giffen product has to be inferior good and has been always regarded as an exception of law of demand is therefore not convincing. The current...

This thesis is a formal refutation of the characteristics approach to the economics of quality, which is particularly associated with Kelvin Lancaster. Many of the criticisms apply equally to other approaches to the economics of quality

For years those teaching and writing about antitrust law have stressed three basic goals - consumer surplus, allocative efficiency, and productive efficiency. Rarely, if ever, are the limitations of those goals revealed to readers. For example, in determining costs of production, external costs...

Although there are alternative models which can explain the Allais paradox with non-standard preferences, they do not take the emerging evidence on preference imprecision into account. The imprecision is so far incorporated into these models by adding a stochastic specification implying the...

For years those teaching and writing about antitrust law have stressed three basic goals -- consumer surplus, allocative efficiency, and productive efficiency. Rarely, if ever, are the limitations of those goals revealed to readers. For example, in determining costs of production, external costs...

This paper proves that there are almost no normal commodities for individual consumers in consumer behavior theory. The income effects of all abnormal commodities are negative and larger than substitution effects. Both income effects and substitution effects are unobservable. All proves on...

Literature in economics and psychology on moral behaviour explores the contexts in which people act in ways that are consistent or inconsistent with their past actions. Such inconsistencies appear to violate economists' assumption of rational consumer behaviour. In this note we show that a...

This paper applies recent advances in the theory of learning to the analysis of consumer behaviour in a dynamic duopoly. Nash equilibrium play is characterised when consumers learn adaptively about the relative quality of the two products. A constrast is made between belief-based and...

This paper presents a laboratory experiment that directly tests the theoretical predictions of consumption choices under rational inattention. Subjects are asked to select consumption when income is random. They can optimally decide to reduce uncertainty about income by acquiring signals about...