# Market Demand: Theory and Empirical Evidence

Werner Hildenbrand
Pages: 216
https://www.jstor.org/stable/j.ctt7zvrjw

1. Front Matter
(pp. i-vi)
(pp. vii-viii)
3. Preface
(pp. ix-2)
W.H.
4. Chapter 1 Introduction
(pp. 3-29)

In this book I shall develop a theory ofmarket demand. The principal aim of this theory is to identify the conditions under which the Law¹ of Demand will hold. I shall defend the thesis thatthe Law of Demand is mainly due to the heterogeneity of the population of households; the “rationality” of individual households plays only a minor role. After explaining what I understand by the Law of Demand, it will become clear that my goal is quite modest. However, I believe, it is fundamental.

What does the Law of Demand assert? First of all the Law of...

5. Chapter 2 Market Demand
(pp. 30-71)

Throughout this book, market demand refers to a large group of households called thepopulationof households. These households are considered at a certaintime period, for example, the year 1992 or the first quarter of 1993. I have in mind households of a certain region, for example, all private households in the United Kingdom. The whole population might be quite heterogeneous. If necessary I shall consider later subpopulations that are stratified in a suitable way. I want to model themean demandfunction, also called themarket demand, of this population. Mean demand thus is average demand per household,...

6. Chapter 3 Increasing Dispersion
(pp. 72-121)

In this chapter I shall try to answer the following question: Under what circumstances does themean demandof a large population of households satisfy Wald’s Axiom?

In the Introduction I explained why an economic theorist might be interested in deriving Wald’s Axiom for mean demand. Wald’s Axiom for the excess demand of a multicommodity competitive demand–supply system seems to be the weakest assumption, which implies that the equilibrium price system is generically well-determined. For details I refer to Appendix 2.

Wald’s Axiom for the mean demand$\bar f(p,x)$of a population with identical incomexasserts that for any...

7. Chapter 4 The Law of Demand
(pp. 122-167)

In this chapter I discuss the central theme of demand theory: the Law of Demand for the market demand function. The law asserts that the market demand function$p \mapsto F(p): = \int_{\mathbb{R} \times \mathcal{A}} {{f^\alpha }(p,x)d\mu }$is strictly monotone, i.e., for any two price vectorspandqwithpq, one has$(p-q)\cdot (F(p)-F(q))\textless 0.$That is to say, the vector of price changes and the vector of demand changes point in opposite directions. (see Figure 4.1)

As I explained in the introduction, one can derive the monotonicity of the market demand function in theμ-model by simply assuming that the support of the joint distribution of...

8. Appendix 1 Monotone Functions
(pp. 168-170)
9. Appendix 2 Wald’s Axiom
(pp. 171-174)
10. Appendix 3 The Weak Axiom of Revealed Preference and the Slutsky Decomposition
(pp. 175-179)
11. Appendix 4 Monotonicity of Individual Demand Functions
(pp. 180-184)
12. Appendix 5 Spread and Dispersion
(pp. 185-186)
13. Appendix 6 The Structure of the Matrix $B(\bar f,\rho )$
(pp. 187-194)
14. References
(pp. 195-198)
15. Author Index
(pp. 199-200)
16. Subject Index
(pp. 201-204)
17. Index of Frequently Used Symbols
(pp. 205-205)