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Connected Substitutes and Invertibility of Demand / Steven T. Berry, Amit Gandhi, Philip Haile.
- Format:
- Book
- Author/Creator:
- Berry, Steven T.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w17193.
- NBER working paper series no. w17193
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2011.
- Summary:
- We consider the invertibility of a nonparametric nonseparable demand system. Invertibility of demand is important in several contexts, including identification of demand, estimation of demand, testing of revealed preference, and economic theory requiring uniqueness of market clearing prices. We introduce the notion of "connected substitutes" and show that this structure is sufficient for invertibility. The connected substitutes conditions require weak substitution between all goods and sufficient strict substitution to necessitate treating them in a single demand system. These conditions are satisfied in many standard models, have transparent economic interpretation, and allow us to show invertibility without functional form restrictions, smoothness assumptions, or strong domain restrictions.
- Notes:
- Print version record
- July 2011.
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