Consumer Choice: Rhetoric and Reality
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CONSUMER CHOICE 1.1. Unit of Analysis and Preferences. The
CONSUMER CHOICE 1. THE CONSUMER CHOICE PROBLEM 1.1. Unit of analysis and preferences. The fundamental unit of analysis in economics is the economic agent. Typically this agent is an individual consumer or a firm. The agent might also be the manager of a public utility, the stockholders of a corporation, a government policymaker and so on. The underlying assumption in economic analysis is that all economic agents possess a preference ordering which allows them to rank alternative states of the world. The behavioral assumption in economics is that all agents make choices consistent with these underlying preferences. 1.2. Definition of a competitive agent. A buyer or seller (agent) is said to be competitive if the agent assumes or believes that the market price of a product is given and that the agent’s actions do not influence the market price or opportunities for exchange. 1.3. Commodities. Commodities are the objects of choice available to an individual in the economic sys- tem. Assume that these are the various products and services available for purchase in the market. Assume that the number of products is finite and equal to L ( =1, ..., L). A product vector is a list of the amounts of the various products: ⎡ ⎤ x1 ⎢ ⎥ ⎢x2 ⎥ x = ⎢ . ⎥ ⎣ . ⎦ xL The product bundle x can be viewed as a point in RL. 1.4. Consumption sets. The consumption set is a subset of the product space RL, denoted by XL ⊂ RL, whose elements are the consumption bundles that the individual can conceivably consume given the phys- L ical constraints imposed by the environment. -
CHOICE – a NEW STANDARD for COMPETITION LAW ANALYSIS? a Choice — a New Standard for Competition Law Analysis?
GO TO TABLE OF CONTENTS GO TO TABLE OF CONTENTS CHOICE – A NEW STANDARD FOR COMPETITION LAW ANALYSIS? a Choice — A New Standard for Competition Law Analysis? Editors Paul Nihoul Nicolas Charbit Elisa Ramundo Associate Editor Duy D. Pham © Concurrences Review, 2016 GO TO TABLE OF CONTENTS All rights reserved. No photocopying: copyright licenses do not apply. The information provided in this publication is general and may not apply in a specifc situation. Legal advice should always be sought before taking any legal action based on the information provided. The publisher accepts no responsibility for any acts or omissions contained herein. Enquiries concerning reproduction should be sent to the Institute of Competition Law, at the address below. Copyright © 2016 by Institute of Competition Law 60 Broad Street, Suite 3502, NY 10004 www.concurrences.com [email protected] Printed in the United States of America First Printing, 2016 Publisher’s Cataloging-in-Publication (Provided by Quality Books, Inc.) Choice—a new standard for competition law analysis? Editors, Paul Nihoul, Nicolas Charbit, Elisa Ramundo. pages cm LCCN 2016939447 ISBN 978-1-939007-51-3 ISBN 978-1-939007-54-4 ISBN 978-1-939007-55-1 1. Antitrust law. 2. Antitrust law—Europe. 3. Antitrust law—United States. 4. European Union. 5. Consumer behavior. 6. Consumers—Attitudes. 7. Consumption (Economics) I. Nihoul, Paul, editor. II. Charbit, Nicolas, editor. III. Ramundo, Elisa, editor. K3850.C485 2016 343.07’21 QBI16-600070 Cover and book design: Yves Buliard, www.yvesbuliard.fr Layout implementation: Darlene Swanson, www.van-garde.com GO TO TABLE OF CONTENTS ii CHOICE – A NEW STANDARD FOR COMPETITION LAW ANALYSIS? Editors’ Note PAUL NIHOUL NICOLAS CHARBIT ELISA RAMUNDO In this book, ten prominent authors offer eleven contributions that provide their varying perspectives on the subject of consumer choice: Paul Nihoul discusses how freedom of choice has emerged as a crucial concept in the application of EU competition law; Neil W. -
Lecture Notes General Equilibrium Theory: Ss205
LECTURE NOTES GENERAL EQUILIBRIUM THEORY: SS205 FEDERICO ECHENIQUE CALTECH 1 2 Contents 0. Disclaimer 4 1. Preliminary definitions 5 1.1. Binary relations 5 1.2. Preferences in Euclidean space 5 2. Consumer Theory 6 2.1. Digression: upper hemi continuity 7 2.2. Properties of demand 7 3. Economies 8 3.1. Exchange economies 8 3.2. Economies with production 11 4. Welfare Theorems 13 4.1. First Welfare Theorem 13 4.2. Second Welfare Theorem 14 5. Scitovsky Contours and cost-benefit analysis 20 6. Excess demand functions 22 6.1. Notation 22 6.2. Aggregate excess demand in an exchange economy 22 6.3. Aggregate excess demand 25 7. Existence of competitive equilibria 26 7.1. The Negishi approach 28 8. Uniqueness 32 9. Representative Consumer 34 9.1. Samuelsonian Aggregation 37 9.2. Eisenberg's Theorem 39 10. Determinacy 39 GENERAL EQUILIBRIUM THEORY 3 10.1. Digression: Implicit Function Theorem 40 10.2. Regular and Critical Economies 41 10.3. Digression: Measure Zero Sets and Transversality 44 10.4. Genericity of regular economies 45 11. Observable Consequences of Competitive Equilibrium 46 11.1. Digression on Afriat's Theorem 46 11.2. Sonnenschein-Mantel-Debreu Theorem: Anything goes 47 11.3. Brown and Matzkin: Testable Restrictions On Competitve Equilibrium 48 12. The Core 49 12.1. Pareto Optimality, The Core and Walrasian Equiilbria 51 12.2. Debreu-Scarf Core Convergence Theorem 51 13. Partial equilibrium 58 13.1. Aggregate demand and welfare 60 13.2. Production 61 13.3. Public goods 62 13.4. Lindahl equilibrium 63 14. -
Assessing Ricardian Equivalence
WORKING PAPERS ASSESSING RICARDIAN EQUIVALENCE Roberto RICCIUTI* Dipartimento di Economia Politica, Università di Siena Piazza San Francesco 7, 53100 Siena, Italy E-mail: [email protected] ABSTRACT This paper reviews the literature on Ricardian equivalence. This hypothesis may be interpreted as a generalisation to the short and the long run of the theories which put no weight on the real effects of public policies on aggregate demand. We argue that Ricardian equivalence relies on both permanent income hypothesis and the fulfilment of the intertemporal government budget constraint. The theoretical literature emphasises several reasons for departures from this hypothesis. However, the empirical literature is inconclusive. When Ricardian equivalence is tested in a life-cycle framework the hypothesis is usually rejected, while when the empirical analysis is based on optimising models, it is usually accepted. JEL Classification: E62 – H31 – H62 – H63 Keywords: Fiscal Policy, debt, taxes, goverment spending * Simon Wren-Lewis introduced me to the topic. Alberto Dalmazzo, Peter Diamond and John Seater provided useful comments. I thank them retaining the property rights of any mistakes. March 2001 In point of economy, there is no real difference in either of three modes: for twenty millions in one payment, one million per annum for ever, or 1,200,000 for 45 years, are precisely the same value; but people who pay taxes never so estimate them, and therefore do not manage their private affairs accordingly. We are too apt to think that war is burdensome only in proportion to what we are at the moment called to pay for it in taxes, reflecting on the probable duration of such taxes. -
What Role Does Consumer Sentiment Play in the U.S. Economy?
The economy is mired in recession. Consumer spending is weak, investment in plant and equipment is lethargic, and firms are hesitant to hire unemployed workers, given bleak forecasts of demand for final products. Monetary policy has lowered short-term interest rates and long rates have followed suit, but consumers and businesses resist borrowing. The condi- tions seem ripe for a recovery, but still the economy has not taken off as expected. What is the missing ingredient? Consumer confidence. Once the mood of consumers shifts toward the optimistic, shoppers will buy, firms will hire, and the engine of growth will rev up again. All eyes are on the widely publicized measures of consumer confidence (or consumer sentiment), waiting for the telltale uptick that will propel us into the longed-for expansion. Just as we appear to be headed for a "double-dipper," the mood swing occurs: the indexes of consumer confi- dence register 20-point increases, and the nation surges into a prolonged period of healthy growth. oes the U.S. economy really behave as this fictional account describes? Can a shift in sentiment drive the economy out of D recession and back into good health? Does a lack of consumer confidence drag the economy into recession? What causes large swings in consumer confidence? This article will try to answer these questions and to determine consumer confidence’s role in the workings of the U.S. economy. ]effre9 C. Fuhrer I. What Is Consumer Sentitnent? Senior Econotnist, Federal Reserve Consumer sentiment, or consumer confidence, is both an economic Bank of Boston. -
Consumer Behaviour During Crises
Journal of Risk and Financial Management Article Consumer Behaviour during Crises: Preliminary Research on How Coronavirus Has Manifested Consumer Panic Buying, Herd Mentality, Changing Discretionary Spending and the Role of the Media in Influencing Behaviour Mary Loxton 1, Robert Truskett 1, Brigitte Scarf 1, Laura Sindone 1, George Baldry 1 and Yinong Zhao 2,* 1 Discipline of International Business, University of Sydney, Sydney, NSW 2006, Australia; [email protected] (M.L.); [email protected] (R.T.); [email protected] (B.S.); [email protected] (L.S.); [email protected] (G.B.) 2 School of Economics, Fudan University, Shanghai 200433, China * Correspondence: [email protected] Received: 24 June 2020; Accepted: 19 July 2020; Published: 30 July 2020 Abstract: The novel coronavirus (COVID-19) pandemic spread globally from its outbreak in China in early 2020, negatively affecting economies and industries on a global scale. In line with historic crises and shock events including the 2002-04 SARS outbreak, the 2011 Christchurch earthquake and 2017 Hurricane Irma, COVID-19 has significantly impacted global economic conditions, causing significant economic downturns, company and industry failures, and increased unemployment. To understand how conditions created by the pandemic to date compare to the aforementioned shock events, we conducted a thorough literature review focusing on the presentation of panic buying and herd mentality behaviours, changes to discretionary consumer spending as defined by Maslow’s Hierarchy of Needs, and the impact of global media on these behaviours. The methodology utilised to analyse panic buying, herd mentality and altered patterns of consumer discretionary spending (according to Maslow’s theory) involved an analysis of consumer spending data, largely focused on Australian and American markets. -
CONSUMER CONFIDENCE and the ECONOMY by Jay Wortley, Senior Economist
STATE NOTES: Topics of Legislative Interest March/April 2001 CONSUMER CONFIDENCE AND THE ECONOMY by Jay Wortley, Senior Economist There are a number of key economic variables that are closely watched because they help identify the current state of the economy and provide some clues as to where the economy is headed. One of these indicators is the University of Michigan’s Index of Consumer Sentiment. This index is designed to measure the level of confidence consumers have in the economy. This article explains why this index is closely watched, describes how the index is created, and presents what the index is revealing about the current state of the economy. Why is Consumer Confidence Important? Consumer confidence is important because it is a key factor that helps determine how much consumers are going to spend on goods and services, which is one of the major driving forces in the economy. From 1980 to 2000, expenditures by consumers accounted for 67% of total economic activity. Due to the fact that consumer spending is a major source of overall economic activity, most of the time it is safe to say that as consumer spending goes, so goes the overall economy. For example, in 1991, personal consumption expenditures, adjusted for inflation, declined 0.2% and overall economic activity, as measured by real Gross Domestic Product (GDP) fell 0.5%, but in 2000, real consumer spending increased 5.3% and total economic activity grew 5.0%. Consumer confidence is a good indicator of consumer spending because the more confident consumers are about future economic conditions, the more likely they are to purchase consumer goods, particularly the relatively high- priced major purchases such as motor vehicles, houses, and household furnishings. -
Convenience Matters Serving the New Mexican Consumer
The Retail and Consumer Industry in Mexico May 2016 Convenience matters Serving the new Mexican consumer In this report 2 Mexico: Stability amidst global volatility 4 More than just tequila: Significance of the retail and consumer sector 8 More pesos in the pocket: The sector takes off 12 Convenience matters 16 In the shadows: The vast informal market 22 Building capability muscles and aligning your operating model 29 The winning concoction: Local knowledge, global expertise 31 Unlocking the enablers for growth www.pwc.com/gmc Foreword As the world’s developing markets face a Arguably, retail and consumer reflects There are excellent examples of such time of volatility, Mexico stands out as the opportunities emerging from the companies in Mexico. A retailer like one of the key markets weathering the duality of the Mexican economy better FAMSA has managed to properly storm. It is doing so through sustained than any other sector: balance the risk required to serve this evolution and slow but steady growth more informal segment of consumers, in many dimensions. The retail and • Modern format retail stores and through a combination of deep consumer sector is one industry which multinational franchises such as consumer knowledge and alternative has the potential to exceed Mexico’s Walmart and Starbucks are constantly contact channels, while also leveraging average national future growth. This growing and developing, alongside its traditional stores and offerings, not will be driven by a combination of the resilient traditional ‘changarros’ just to gain access to these new economic and socio-demographic and adapted concepts such as OXXO consumers, but also to earn increased trends, the progressive implementation and Farmacias Similares. -
The-Great-Depression-Glossary.Pdf
The Great Depression | Glossary of Terms Glossary of Terms Balanced budget – Government revenues equal expenditures on an annual basis. (Lesson 5) Bank failure – When a bank’s liabilities (mainly deposits) exceed the value of its assets. (Lesson 3) Bank panic – When a bank run begins at one bank and spreads to others, causing people to lose confidence in banks. (Lesson 3) Bank reserves – The sum of cash that banks hold in their vaults and the deposits they maintain with Federal Reserve banks. (Lesson 3) Bank run – When many depositors rush to the bank to withdraw their money at the same time. (Lesson 3) Bank suspensions – Comprises all banks closed to the public, either temporarily or permanently, by supervisory authorities or by the banks’ boards of directors because of financial difficulties. Banks that close under a special holiday declaration and remained closed only during the designated holiday are not counted as suspensions. (Lesson 4) Banks – Businesses that accept deposits and make loans. (Lesson 2) Budget deficit – When government expenditures exceed revenues. (Lesson 4) Budget surplus – When government revenues exceed expenditures. (Lesson 4) Consumer confidence – The relationship between how consumers feel about the economy and their spending and saving decisions. (Lesson 5) Consumer Price Index (CPI) – A measure of the prices paid by urban consumers for a market basket of consumer goods and services. (Lesson 1) Deflation – A general downward movement of prices for goods and services in an economy. (Lessons 1, 3 and 6) Depression – A very severe recession; a period of severely declining economic activity spread across the economy (not limited to particular sectors or regions) normally visible in a decline in real GDP, real income, employment, industrial production, wholesale-retail credit and the loss of overall confidence in the economy. -
Financial Stability Or Instability? Impact from Chinese Consumer 2
FINANCIAL STABILITY OR INSTABILITY? IMPACT FROM CHINESE CONSUMER 2. CONFIDENCE Shi-Qi LIU1 Xin-Zhou QI2 Meng QIN3 Chi-Wei SU4 Abstract This paper attempts to study the dynamic causal relationship between Chinese consumer confidence and financial stability by using a sub-sample time-varying rolling window test. Through empirical research, it is proved that consumer confidence improves the stability of the financial market, ensure the smooth operation of the financial system, and reduce the possibility of financial risks. Similarly, financial stability has a positive impact on consumers. Due to the government's intervention in the economy, the financial market is relatively stable, thus consumers are full of confidence in the market. Therefore, we find that the causal relationship between consumer confidence and financial stability is consistent with financial system volatility model, which contributes to the stability of financial markets and the reduction of financial crises. This finding helps monetary authorities maintain financial stability by increasing consumer confidence and making the most effective decisions based on economic trends. Keywords: consumer confidence; financial stability; bootstrap; rolling window; causality; time-varying JEL Classification: C32, D81, E32 1 Qingdao University, School of Economics, No. 308 Ningxia Rd., Qingdao, Shandong, China; E- mail: [email protected] 2 Corresponding Author. Qingdao University, School of Economics, No. 308 Ningxia Rd., Qingdao, Shandong, China; E-mail: [email protected] 3 Party School of the Central Committee of the Communist Party of China (National Academy of Governance), Graduate Academy, No. 100 Dayouzhuang, Beijing, China; E-mail: [email protected] 4 Corresponding Author. Qingdao University, School of Economics, No. -
Navorsingsverslag Research Report
NAVORSINGSVERSLAG RESEARCH REPORT 2001 INHOUDSOPGAWE / TABLE OF CONTENTS Bladsye / Pages VOORWOORD / FOREWORD i-ii GIDS TOT KATEGORIEË GEBRUIK / GUIDE TO CATEGORIES USED iii-iv FAKULTEIT LETTERE EN WYSBEGEERTE / FACULTY OF ARTS 1-58 FAKULTEIT NATUURWETENSKAPPE / FACULTY OF SCIENCE 59-115 FAKULTEIT OPVOEDKUNDE / FACULTY OF EDUCATION 116-132 FAKULTEIT LANDBOU- EN BOSBOUWETENSKAPPE / 133-173 FACULTY OF AGRICULTURAL AND FORESTRY SCIENCES FAKULTEIT REGSGELEERDHEID / FACULTY OF LAW 174-180 FAKULTEIT TEOLOGIE / FACULTY OF THEOLOGY 181-190 FAKULTEIT EKONOMIESE EN BESTUURWETENSKAPPE / 191-217 FACULTY OF ECONOMIC AND MANAGEMENT SCIENCES FAKULTEIT INGENIEURSWESE / FACULTY OF ENGINEERING 218-253 FAKULTEIT GENEESKUNDE / FACULTY OF MEDICINE 254-342 FAKULTEIT KRYGSKUNDE / FACULTY OF MILITARY SCIENCE 343-350 ALGEMEEN / GENERAL 351-353 Redakteur / Editor: JP Groenewald Senior Direkteur: Navorsing / Senior Director: Research Universiteit van Stellenbosch / University of Stellenbosch Stellenbosch 7602 ISBN 0-7972-0907-7 i VOORWOORD Die jaarlikse Navorsingsverslag bied 'n omvattende rekord van die navorsingsuitsette wat in die betrokke jaar aan die Universiteit gelewer is. Benewens hierdie oorkoepelende perspektief op navorsing word jaarliks ook ander perspektiewe op navorsing in fakulteitspublikasies aangebied. Statistieke omtrent navorsingsuitsette word in ander publikasies van die Universiteit se Afdeling Navorsingsontwikkeling aangegee. Die Universiteit se navorsingspoging is, soos in die verlede, gesteun deur 'n verskeidenheid van persone en organisasies binne sowel as buite die Universiteit. Die US spreek sy besondere dank uit teenoor die statutêre navorsingsrade en kommissies, staatsdepartemente, sakeondernemings, stigtings en private indiwidue vir volgehoue ondersteuning in dié verband. Wat die befondsing van navorsing betref, word navorsers aan Suid-Afrikaanse universiteite - soos elders in die wêreld - toenemend afhanklik van nuwe bronne vir die finansiering van navorsing. -
Redalyc.Is the Consumer Confidence Index a Sound Predictor of The
Estudios de Economía Aplicada ISSN: 1133-3197 [email protected] Asociación Internacional de Economía Aplicada España Loría, Eduardo; Brito, Luis Is the Consumer Confidence Index a Sound Predictor of the Private Demand in the United States? Estudios de Economía Aplicada, vol. 22, núm. 3, diciembre, 2004, pp. 795-809 Asociación Internacional de Economía Aplicada Valladolid, España Available in: http://www.redalyc.org/articulo.oa?id=30122317 How to cite Complete issue Scientific Information System More information about this article Network of Scientific Journals from Latin America, the Caribbean, Spain and Portugal Journal's homepage in redalyc.org Non-profit academic project, developed under the open access initiative E STUDIOS DE ECONOMÍA A PLICADA VOL. 22 - 3, 2004. PÁGS. 727 (14 páginas) Is the Consumer Confidence Index a Sound Predictor of the Private Demand in the United States? LORÍA , EDUARDO(*) Y BRITO, LUIS(**) (*)School of Economics, National Autonomous University of Mexico (UNAM).(**)Journal CIENCIA ergo sum, Autonomous University of the State of Mexico (UAEM) (*) Edificio Anexo, Tercer Piso, Cub. 305 Circuito Interior S/N, Ciudad Universitaria Del. Coyoacán, México, D. F. 04510 Telf.: +52 (55) 5622 2142 - E-mail: [email protected] (**) Av. V. Gómez Farías No. 200-2 Ote. Toluca, México, 50000 E-mail: [email protected] - Telf. & fax: +52 (722) 213 7529 ABSTRACT The United States (U.S.) Consumer Confidence Index (CCI) has been widely and unambiguously regarded as a good ‘predictor’ of the U.S.’s private investment and consumption. In order to demonstrate such with statistical rigor, co-integration and Granger causality tests were applied for 1978:Q1-2003:Q1.