A well-behaved utility function can generate Giffen behavior

We present a specific utility function which generates Giffen behavior. The derived demand function of each good is not only continuous in its price and income but also partly increasing in its price and decreasing in income. Moreover, we show that Giffen behavior is compatible with arbitrary level of utility; thus the standard "margarine-butter paradigm" may not adequately explain Giffen's paradox.Length: 21 pages

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Year of publication:	2006-02
Authors:	Doi, Junko ; Iwasa, Kazumichi ; Shimomura, Koji
Institutions:	Research Institute for Economics and Business Administration, Kobe University

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Series:	Discussion Paper Series. - ISSN 1345-2207.
Type of publication:	Book / Working Paper
Notes:	Number 181
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005675567