Weber-Fechner's Law and Demand Function

Kazuyasu Shigemoto

Microeconomics from EconWPA

Abstract: We apply the Weber-Fechner's law, which represents the relation between the magnitude of physical stimulus and the magnitude of psychological sense in human being, to the utility function. We conclude that the utility function of n-types of goods is of separable type u(x_1,x_2,...,x_n)=u_1(x_1)+u_2(x_2)+...+u_n(x_n), which gives the relation of the demand function in the form p_i=d u_i/d x_i. The explicit quantitative form of each utility function, which is suggested by the Weber-Fechner's law, becomes u_i(x_i)=A_i log (x_i/x(0)_i). Then we obtain each demand function in the familiar form p_i=A_i/x_i.

Keywords: Weber-Fechner's law; utility function; demand function (search for similar items in EconPapers)
JEL-codes: D1 D2 D3 D4 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mic
Date: 2004-12-02
Note: Type of Document - tex; pages: 7
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpmi:0412001

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