Abstract

  


 



The Generalized Alchian-Allen Theorem


Junichi Minagawa


Chuo University - Graduate School of Economics

Thorsten Upmann


University of Duisburg-Essen - Mercator School of Management; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
October 30, 2012

CESifo Working Paper Series No. 3969

Abstract:     
The Alchian-Allen substitution theorem states that an increase of the prices of two similar goods by the same amount leads to a relative increase in the compensated demand of the more expensive good. In this paper we generalize this theorem to ordinary demand functions and show under which conditions the Alchian-Allen result continues to hold when income and endowment effects are taken into account.

Number of Pages in PDF File: 10

Keywords: The Alchian-Allen theorem, income and endowment effects

JEL Classification: D110

working papers series


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Date posted: October 31, 2012  

Suggested Citation

Minagawa, Junichi and Upmann, Thorsten, The Generalized Alchian-Allen Theorem (October 30, 2012). CESifo Working Paper Series No. 3969. Available at SSRN: http://ssrn.com/abstract=2168633

Contact Information

Junichi Minagawa
Chuo University - Graduate School of Economics ( email )
Blg 2 Tama Campus
742-1 Higashinakano, Hachioji
Tokyo 192-0393
Japan
Thorsten Upmann (Contact Author)
University of Duisburg-Essen - Mercator School of Management ( email )
Lotharstraße 65
Duisburg, D-47057
Germany
CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
Poschinger Str. 5
Munich, DE-81679
Germany
Feedback to SSRN (Beta)


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