demand theory
56026783
A Kinked Demand Theory of Price Rigidity
I provide a microfounded theory for one of the oldest, but so far informal, explanations of price rigidity: the kinked demand curve theory. Assuming that some customers observe at no cost only the price of the store they happen to be at gives rise to a kink in firms' demand curves: a price increase above the market price repels more customers than a price decrease attracts. The kink in turn makes a range of prices consistent with equilibrium, but an intuitive criterion the adaptive rational expectations criterion selects a unique equilibrium where prices stay constant for a long time. The kinked demand theory is consistent with price setters' account of price rigidity as arising from the customer's not the firm's side, and can be tested against menu cost models in micro data: it predicts that prices should be more likely to change if they have recently changed, and that prices should be more flexible in markets where customers can more easily compare prices. The kinked demand theory has novel implications for monetary policy: its Phillips curve is strongly convex but does not contain any (present or past) expectations of inflation; its trade off between output and inflation persists in the long run; changes to the distribution of sectoral productivity shift the Phillips curve; and monetary shocks have a much longer lasting real effect than in a menu cost model, despite also being a model of state dependent pricing.
Stephane Dupraz
58203196
A Revision Of Demand Theory
Eric Mayer
156883082
A Demand Theory of the Price Level
In this paper I propose a theory of a globally unique price level based on the simple idea that the price equates demand with supply in the goods market. Monetary policy through setting nominal interest rates, e.g. an interest rate peg, and fiscal policy, which satisfies the present value budget constraint at all times, jointly determine the price level. In contrast to the conventional view the long run inflation rate is, in the absence of output growth, equal to the growth rate of nominal government spending which is controlled by fiscal policy. This new theory where nominal government spending anchors aggregate demand and therefore current and future prices suggests a different perspective on the fiscal and monetary transmission mechanism, on policy coordination, on policies at the zero lower bound and on U.S. inflation history.
Marcus Hagedorn
154939428
Gravity models for tourism demand: theory and use
Neglected by the tourism demand literature for the last decades, gravity models have re emerged as a way for modeling tourism demand when the role of structural factors on tourism has to be evaluated. From the initial formulation of the gravity model, more sophisticated specifications have been developed including a more complete set of explanatory variables and allowing differentiation between origin and destination countries. In this paper, we propose a theoretical background to the gravity model for bilateral tourism flows derived from the individual utility theory. The issues in distinguishing the recent versions of gravity models from aggregated demand models are shown and the suitability of this methodology when structural factors have to be evaluated and quantified in the context of tourism demand is discussed.
Clive Morley Jaume Rossello Maria Santana-Gallego
124568377
Demand Theory is Founded on Errors
The applicability of the operations of algebra and calculus is a foundations of science problem. These operations have been applied incorrectly and where they are not applicable in microeconomic theory, the theory of games, decision theory and throughout the social sciences because the conditions for applicability of mathematical operations have not been identified in the literature. The applicability of these operations, in particular in demand theory, is founded on errors that are analyzed in detail in Barzilai [2 and 3] In a recent paper [7] Katzner, whose work [6] contains these errors, says that
Jonathan Barzilai
154021861
Forecasting and Inventory Performance in a Two Stage Supply Chain with ARIMA(0,1,1) Demand: Theory and Empirical Analysis
The ARIMA(0,1,1) demand model has been analysed extensively by researchers and used widely by forecasting practitioners due to its attractive theoretical properties and empirical evidence in its support. However, no empirical investigations have been conducted in the academic literature to analyse demand forecasting and inventory performance under such a demand model. In this paper, we consider a supply chain formed by a manufacturer and a retailer facing an ARIMA(0,1,1) demand process. The relationship between the forecasting accuracy and inventory performance is analysed along with an investigation on the potential benefits of forecast information sharing between the retailer and the manufacturer. Results are obtained analytically but also empirically by means of experimentation with the sales data related to 329 Stock Keeping Units (SKUs) from a major European superstore. Our analysis contributes towards the development of the current state of knowledge in the areas of inventory forecasting and forecast information sharing and offers insights that should be valuable from the practitioner perspective.
M Zied Babai Mohammad M Ali John E Boylan Aris A Syntetos
150898227
Demand Theory: Preferences
The economic analysis of consumer behavior begins with a model of rational behavior. The consumer is assumed to have a well defined utility function that, coupled with a specification of the constraints facing the consumer, implies a specific action. This chapter develops and illustrates the nature of a utility function. The next two chapters add specifications of the constraints that face the consumer and derive the model's implications.
Michael Ralph Hammock James W Mixon
156628214
The Mineral Resources Demand Theory and the Prediction Model
This paper describes the energy and mineral resources demand theory centered on capita mineral resources consumption and capita GDP S shaped rules,mineral resources consumption intensity reverse U shaped rules and progressive laws of wave rules for mineral resources demand,and the energy and mineral resources synthetic prediction model based on the demand theory.The primary energy,crude steel,copper and aluminum demand tendency in China and the whole globe between 2010 and 2030 was predicted by using this model,and the results were compared with the results obtained by other prediction methods.On such a basis,it is concluded that this theoretical model is advanced and reliable.
Yu Wen-jia
117457799
Discrete Choice Modelling and Air Travel Demand: Theory and Applications
Contents: Preface Introduction Binary logit and multinomial logit models Nested logit model Structured extensions of MNL and NL discrete choice models, Laurie A. Garrow, Frank S. Koppelman, and Misuk Lee Network GEV models, Jeffrey P. Newman Mixed logit MNL, NL, and OGEV models of itinerary choice, Laurie A. Garrow, Gregory M. Coldren, and Frank S. Koppelman Conclusions and directions for future research References Indexes.
Laurie A Garrow
60855865
Discrete Choice Analysis: Theory and Application to Travel Demand
This book, which is intended as a graduate level text and a general professional reference, presents the methods of discrete choice analysis and their applications in the modeling of transportation systems. The first seven chapters provide a basic introduction to discrete choice analysis that covers the material needed to apply basic binary and multiple choice models. The chapters are as follows: introduction; review of the statistics of model estimation; theories of individual choice behavior; binary choice models; multinomial choice; aggregate forecasting techniques; and tests and practical issues in developing discrete choice models. The rest of the chapters cover more advanced material and culminate in the development of a complete travel demand model system presented in chapter 11. The advanced chapters are as follows: theory of sampling; aggregation and sampling of alternatives; models of multidimensional choice and the nested logit model; and systems of models. The last chapter (12) presents an overview of current research frontiers.
Moshe E Ben-Akiva Steven R Lerman