A Behavioural Approach to Kinked Demand Curves

Stavros Drakopoulos

MPRA Paper from University Library of Munich, Germany

Abstract: The starting point of this paper is the significance for economic theory of the introduction of threshold sensitive behavior which is better known in psychology as the Weber-Fechner Law. It is shown that the incorporation of this Law can give an individual multi-kinked demand curve which can be approximated as a market demand curve of the Sweezy type. In terms of macroeconomic significance, the Law can be connected to income policies, saving behavior and expectations in the money markets.

Keywords: Kinked Demand; Price Threshold; Consumer Behaviour (search for similar items in EconPapers)
JEL-codes: D03 D11 (search for similar items in EconPapers)
Date: 1992-06
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Citations: View citations in EconPapers (1)

Published in The Cyprus Journal of Economics 1.5(1992): pp. 1-14

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:90373

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