Income Distributions and the Axiom of Revealed Preference

Birgit Grodal and Werner Hildenbrand
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Werner Hildenbrand: University of Bonn

No 87-02, Discussion Papers from University of Copenhagen. Department of Economics

Abstract: The authors consider an economy with pure factors of production, private ownership of endowments, and constant returns to scale in production. Typically in such an economy, the weak axiom of revealed preference for market demand does not hold. The main reason for this is that the income distribution in such a private ownership economy depends too sensitively on the price system.

Keywords: microeconomic; theory (search for similar items in EconPapers)
Pages: 7 pages
Date: 1987-12
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Published as: "The Weak Axiom of Revealed Preference in a Productive Economy", in Review of Economic Studies, 1989, 56(4) pp. 635-39

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Persistent link: https://EconPapers.repec.org/RePEc:kud:kuiedp:8702

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