A Class of Symmetric and Quadratic Utility Functions Generating Giffen Demand
I provide a simple example of a quadratic utility function that generates a Giffen demand. The utility function is symmetric, increasing and concave. Interestingly, the Giffen effect arises in the subspace where the utility function is strictly increasing and strictly concave. A full characterizatio...
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| Format: | text |
| Language: | English |
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Institutional Knowledge at Singapore Management University
2015
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| Online Access: | https://ink.library.smu.edu.sg/soe_research/1645 https://ink.library.smu.edu.sg/context/soe_research/article/2644/viewcontent/ClassSymmetricQuadraticGiffen_2015.pdf |
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| Institution: | Singapore Management University |
| Language: | English |
| Summary: | I provide a simple example of a quadratic utility function that generates a Giffen demand. The utility function is symmetric, increasing and concave. Interestingly, the Giffen effect arises in the subspace where the utility function is strictly increasing and strictly concave. A full characterization of the parameter conditions under which the Giffen demand arises is provided. |
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