The consumer’s demand functions defined to study contingent consumption plans

Pierpaolo Angelini () and Fabrizio Maturo ()
Additional contact information
Pierpaolo Angelini: Università “La Sapienza”
Fabrizio Maturo: Università degli Studi della Campania “L. Vanvitelli”

Quality & Quantity: International Journal of Methodology, 2022, vol. 56, issue 3, No 12, 1159-1175

Abstract: Abstract Given two probability distributions expressing returns on two single risky assets of a portfolio, we innovatively define two consumer’s demand functions connected with two contingent consumption plans. This thing is possible whenever we coherently summarize every probability distribution being chosen by the consumer. Since prevision choices are consumption choices being made by the consumer inside of a metric space, we show that prevision choices can be studied by means of the standard economic model of consumer behavior. Such a model implies that we consider all coherent previsions of a joint distribution. They are decomposed inside of a metric space. Such a space coincides with the consumer’s consumption space. In this paper, we do not consider a joint distribution only. It follows that we innovatively define a stand-alone and double risky asset. Different summary measures of it characterizing consumption choices being made by the consumer can then be studied inside of a linear space over $${\mathbb {R}}$$ R . We show that it is possible to obtain different summary measures of probability distributions by using two different quadratic metrics. In this paper, our results are based on a particular approach to the origin of the variability of probability distributions. We realize that it is not standardized, but it always depends on the state of information and knowledge of the consumer.

Keywords: 2-parallelepiped; $$\alpha$$ α -product; $$\alpha$$ α -norm; Antisymmetric tensor; Non-linear metric; Linear metric; 60A05; 60B05; 91B24; 91B16; 91B06; 91B08 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11135-021-01170-2 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:qualqt:v:56:y:2022:i:3:d:10.1007_s11135-021-01170-2

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/11135

DOI: 10.1007/s11135-021-01170-2

Access Statistics for this article

Quality & Quantity: International Journal of Methodology is currently edited by Vittorio Capecchi

More articles in Quality & Quantity: International Journal of Methodology from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().