On Duality and the Benefit Function
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Date
2010
Publication Type
Journal Article
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yes
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Abstract
This paper investigates the duality relationships between Marshallian and compensated price-dependent consumer demands. We associate the compensated price-dependent demand with Luenberger's benefit function, which has nice aggregation properties and provides a general basis for conducting welfare analysis. As an analog to the well-known "Slutsky equation," we derive a "Luenberger equation" establishing the general relationships between Marshallian and compensated price-dependent slopes. Our duality results strengthen the conceptual linkages between positive economic analysis and welfare analysis. © 2009 Springer-Verlag.
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published
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Journal / series
Volume
99 (2)
Pages / Article No.
173 - 184
Publisher
Springer
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Date created
Subject
Duality; Benefit; Consumer welfare; Price-dependent demand
Organisational unit
03728 - Engel, Stefanie (ehemalig)
Notes
Received 21 February 2009, Accepted 27 October 2009, Published online 12 November 2009.