Is Giffen behaviour compatible with the axioms of consumer theory?

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Abstract

A family of direct utility functions is constructed which exhibit the characteristic of Giffenity, while satisfying the axioms of convexity and monotonicity. The approach starts by specifying a price offer curve, C0, with a required backward-bending segment. Then a set of convex indifference curves is constructed having price offer curve arbitrarily close to C0.
Original languageEnglish
Pages (from-to)259-267
Number of pages9
JournalJournal of Mathematical Economics
Volume37
Issue number4
DOIs
Publication statusPublished - 2002

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