On luxury and Equilibrium

Authors

  • Andrea Mantovi Università di Parma, Dipartimento di Economia

DOI:

https://doi.org/10.15353/rea.v6i2.1414

Abstract

Building on a class of transcendental preferences for luxury, explicit solutions for price taking behavior and exchange equilibrium are discussed, which share the analytical tractability of Cobb-Douglas models. Such economies display fundamental positive properties, among which uniqueness and price tâtonnement stability of equilibrium. The monotone comparative statics of the luxury effect is discussed. Pareto sets admit a simple characterization, which generalizes the one set forth by Afriat (1987) so that a richer phenomenology is embraced. Potential lines of progress are envisaged.

 

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Published

2015-04-11

Issue

Vol. 6 No. 2 (2014)

Section

Articles

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