2013
DOI: 10.1016/j.jocm.2013.04.011
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On the path independence conditions for discrete-continuous demand

Abstract: We consider the manner in which the well-established path independence conditions apply to Small & Rosen's (1981) problem of discrete-continuous demand, focussing especially upon the restricted case of discrete choice (probabilistic) demand. We note that the consumer surplus measure promoted by Small & Rosen, which is specific to the probabilistic demand, imposes path independence to price changes a priori. We find that path independence to income changes can further be imposed provided a numeraire good is ava… Show more

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Cited by 6 publications
(3 citation statements)
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“…To better integrate the models, the same remuneration coefficient is used. This allows us to link both situations and ensure consistency with broader microeconomic theory, which states that the marginal rate of substitution is identical at equilibrium ( 47 ). We also allow differences in travel times.…”
Section: Resultsmentioning
confidence: 95%
“…To better integrate the models, the same remuneration coefficient is used. This allows us to link both situations and ensure consistency with broader microeconomic theory, which states that the marginal rate of substitution is identical at equilibrium ( 47 ). We also allow differences in travel times.…”
Section: Resultsmentioning
confidence: 95%
“…Developing the same example using the simple method of calculating the lower and upper bounds on the expected Hicksian compensating variation (33), we get: Batley and Ibáñez (2013b) challenged the theoretical validity of Karlström and Morey's specification (43). This is because (43) embodies two features which are mutually exclusive; it admits path dependence but restricts conditional demand to a single discrete choice.…”
Section: Application Of the Simple Methods To Karlström And Morey (2001)mentioning
confidence: 99%
“…SeeBatley and Ibáñez (2013b) for a discussion of the functional dependence of on prices and income, and the implications for path dependence in the case of sequential price/income changes.…”
mentioning
confidence: 99%