Diminishing marginal utility is neither necessary nor sufficient for downward sloping demand, and it is not necessary for convex indifference curves. We illustrate these facts with two simple counter examples, using valid and easy to understand utility functions. The examples are accompanied...

We solve Ireland's (1994) conspicuous consumption model (where social-status concerns are introduced into the utility function) for Cobb-Douglas (CD) utility. In the resulting generalized CD consumer model, Engel curves are no longer limited to linearity. In the homothetic CD case, total...

We analyze the demand for goods which the consumer has an aversion to consuming in mixtures. Examples are presented. It is suggested that the axiom of non-satiation should be relaxed in order for the model to be internally consistent. The indifference map with mixture aversion and satiation is...

The introduction of real-cash balances into the neoclassical model of the consumer wrecks havoc, in general, on the empirically observable refutable comparative statics properties of the model. We provide the most general solution of this problem to date by deriving a symmetric and negative...

We characterize optimal consumption policies in a recursive intertemporal utility framework with local substitution. We establish existence and uniqueness and a version of the Kuhn-Tucker theorem characterizing the optimal consumption plan. An explicit solution is provided for the case when the...

This paper discusses the recent research on the consumption function that has attempted to relax the assumption of certainty equivalence. While there remain many open questions, both theoretical and empirical, it is clear that the assumption of certainty equivalence can be misleading. Under more...