The Demand For Goods Under Mixture Aversion

David Butler and Peter Moffatt

Manchester School, 2000, vol. 68, issue 3, 349-359

Abstract: We analyse the demand for goods which the consumer has an aversion to consuming in mixtures. Examples are presented. It is suggested that the axiom of non‐satiation should be relaxed in order for the model to be internally consistent. The indifference map with mixture aversion and satiation is constructed and is shown to have very unusual properties. It is then demonstrated that constrained maximization of the underlying utility function can result in both goods being consumed. It is also demonstrated that the type of goods analysed here can exhibit the rare characteristic of Giffenity.

Date: 2000
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