(消费者行为与需求理论)

Chapter2ConsumerBehaviorandDemandTheory()©2005MOL2ThisChapterwillInclude:„2.1PreferenceandUtility()„2.2UtilityMaximizationandChoice„2.3IncomeandSubstitutionEffects„2.4MarketDemandandElasticity3Readingsaboutthischapter„Nicholson:Chapter2-5,7„Zhang:Chapter34OutlineofToday’sClass„2.1PreferenceandUtility„2.1.1AssumptionofConsumer’sPreference„2.1.2FromPreferencetoUtilityFunction„2.1.3IndifferenceCurve„2.1.4SpecialUtilityFunctionsandTheirIndifferenceCurves52.1PreferenceandUtility„2.1.1AssumptionofConsumer’sPreference„2.1.2FromPreferencetoUtilityFunction„2.1.3IndifferenceCurve„2.1.4SpecialUtilityFunctionsandTheirIndifferenceCurves62.1.1AssumptionofConsumer’sPreference„Consumer’sRationalityinEconomics„Basicbehavioralpostulate:Maximizinghiswell-being.()„Consumer’soptimizationisconstrainedbyhisincomeortime.„Decision-makerchoosesbestavailablealternative.„So,tomodelconsumerchoicemustmodelconsumerpreferences.71.DefiningPreference„(consumerpreferences)81.DefiningPreferenceWhenanindividualreportsthat“XispreferredtoY,”itistakentomeanthatallthingsconsidered,heorshefeelbetteroffundersituationXthanundersituationY.Note:X,orYiscalledabundleofconsumptiongoods()92.HowtoExpressPreferenceRelations(1)„Bundlesofconsumptiongoods:),(21xxX=),(21yyY=),(),(2121yyxxf),(),(2121xxyyf),(~),(2121xxyyIfbundleXispreferredtoYIfbundleYispreferredtoXIfconsumerindifferentbetweenXandYForexample,x1=5bananas,x2=6oranges,y1=3coconutsandy2=2packetsofbiscuits102.HowtoExpressPreferenceRelations(2)„Consumerscancomparetwodifferentconsumptionbundles,Xandy:„strictpreference:„weakpreference:„indifference:X~Y„PreferenceRelations„IfXYandYX,thenX~Y„IfXYbutnotYX,thenXYYXfYXf113.HowtoExpressPreferenceRelations(3)„Theseareordinalrelations„Onlyrankalternativebundlesbyorder(e.g.first,second,…)()„Donotspecifymagnitudeofpreferencedifferences12„cardinalutility123…„(ordinalutility),133.AssumptionsofConsumer’sPreference(1)„Assumption1:CompletenessIfXandYareanysituations,theindividualcanalwaysspecifyexactlyoneofthefollowingthreepossibilities:„“XispreferredtoY”,i.e.„“YispreferredtoX”,i.e.„“XandYareequallyattractive”,i.e.),(),(2121yyxxf),(),(2121yyxxpCompletepreferencesmeansconsumercanalwaysmakeaclearchoiceoveranytwobundles,(~),(121yyxx)2143.AssumptionsofConsumer’sPreference(2)•Assumption2:Transitivityifanindividualreportsthat“XispreferredtoY”andthat“YispreferredtoZ,”thenheorshemustalsoreportthat“XispreferredtoZ”),(),(2121yyxxf),(),(2121zzxxf),(),(2121zzyyf,andIfthenTransitivitymeansaconsumerschoicesmustbelogicallyconsistent153.AssumptionsofConsumer’sPreference(3)„Assumption3:Reflexive.„Assumption4:NonSatiationorMoreisgood.Aneconomicgoodisonethatyieldspositivebenefitstopeople.Thus,moreofagoodis,bydefinition,better.()),(),(2121xxxxf163.AssumptionsofConsumer’sPreference(4)„Assumption5:ContinuityIfanindividualreportsthat“XispreferredtoY”thensituationssuitably“closeto”XmustalsobepreferredtoY”„Continuity:smallbundlechangescauseonlysmallchangestothepreferencelevel172.1PreferenceandUtility„2.1.1AssumptionofConsumer’sPreference„2.1.2FromPreferencetoUtilityFunction„2.1.3IndifferenceCurve„2.1.4SpecialUtilityFunctionsandTheirIndifferenceCurves182.1.2FromPreferencetoUtilityFunctions„Ifconsumerpreferencesare„Complete„Reflexive„Transitive„Non-satiation„Continuous(nojumps)„Then,canberepresentedbyacontinuousutilityfunction.191.UtilityFunctions„AutilityfunctionU(x)representsapreferencerelationifandonlyif():x’x”U(x’)U(x”)x’x”U(x’)U(x”)x’∼∼x”U(x’)=U(x”).„Theutilityfunctionmustpreservethepreferenceordering202.GeneralExpressionforUtilityFunction„weassumethatapersonreceivesutilityfromtheconsumptionofngoodsX1,X2,….Xn,whichwecanshowinfunctionalnotationby„Theotherthingsthatappearafterthesemicolonareassumedtobeheldconstant.gs).otherthin;,(21nXXXUUtilityL=213.ArgumentofUtilityFunction„1.U=U(W)Wpresentsanindividualrealwealth.„2.U=U(I,H)Ipresentsanindividual’sincome,Hpresentshoursofnonworktime„3.U=U(C1,C2)C1isconsumptioninthisperiodandC2isconsumptioninthenextperiod.224.CommonExpressionsofUtilityFunction(1)LinearutilityFunction2121),(bxaxxxUUtility+==a0,b0(2)PerfectComplementUtilityFunction()Utility=U(x1,x2)=min{x1,x2}.234.CommonExpressionsofUtilityFunction(3)Cobb-DouglasUtilityFunction(4)CESUtilityFunctionaaxxxxUUtility−==12121),(ρρραα12121])1([),(−−−−+==XXXXUUtility245.CharacteristicsofUtilityFunctions()(1)Utilityisanordinal(ordering)conceptExample:„IfU(x)=6andU(y)=2,thenxy„Butxnotpreferredthreetimesasmuchasy25(2)Non-uniquenessofUtilityMeasures„U(A)=5andU(B)=4orU(A)=1,000,000andU(B)=0.5.„IneithercasethenumbersimplythatAispreferredtoB.Itshowthatwecanexpressthesamepreferencerelationsbythedifferentutilityfunctions.26(2)Non-uniquenessofUtilityMeasuresBundleU1U2U3X67967-2Y74-4Z1-6-8ExampleEachofthethreeutilityfunctionsranksthebundlesinsamewayThepreferenceorderingunaffectedbyamonotonictransformation()oftheutilityfunction27(2)Non-uniquenessofUtilityFunctions„Thereisnouniqueutilityfunctionrepresentationofapreferencerelation„SupposeU(x1,x2)=x1x2„Againconsiderbundles(4,1),(2,3),(2,2)„U(2,3)=6U(4,1)=U(