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The propensity function as formal passkey to economic action

Egmont Kakarot-Handtke ()

MPRA Paper from University Library of Munich, Germany

Abstract: The purpose of the present paper is to demonstrate how the interaction of the structural axiomatic core and the behavioral propensity function produces plausible outcomes in the product market. The propensity function is a compact formal expression of random, semi-random, and deterministic behavioral assumptions. Its two components are direction and magnitude of the rate of change of an elementary axiomatic variable. A type-C propensity function is the formal container for a familiar conception that Samuelson identified as qualitative prediction. Two type-C functions are sufficient to produce stochastic stability and optimality in the product market.

Keywords: New framework of concepts; Structure-centric; Axiom set; Qualitative prediction; Tendency laws; Separability; Determinism–indeterminism; Information function; Action function (search for similar items in EconPapers)
JEL-codes: D01 D03 (search for similar items in EconPapers)
Date: 2011-10-11
New Economics Papers: this item is included in nep-cis
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