The Law of Demand and Risk Aversion

John Quah

No 2002-W3, Economics Papers from Economics Group, Nuffield College, University of Oxford

Abstract: This note proposes a necessary and sufficient condition on a preference to guarantee that the demand function it generates satisfies the law of demand. It shows that the law of demand may be succinctly characterized by differences in an agent's level of risk aversion when she is confronted with different lotteries composed of commodity bundles.

Keywords: law of demand; monotonicity; preference; risk aversion (search for similar items in EconPapers)
Pages: 16 pages
Date: 2002-01-10
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Journal Article: The Law of Demand and Risk Aversion (2003)
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