Dynamic Consumer Theory: A Premier Treatise with Stochastic Dynamic Slutsky Equations

David W. K. Yeung
SRS Consortium, Hong Kong Shue Yan University, Hong Kong, China &
Center of Game Theory, St Petersburg State University, St Petersburg, Russia

Series: Economic Issues, Problems and Perspectives
BISAC: BUS016000

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This book is the first treatise on consumer theory in a dynamic framework. It expands the conventional static consumer theory into a stochastic dynamic framework accommodating various combinations of uncertainties in future income, life-span and future preferences. These extensions incorporate realistic and intrinsic characteristics of the consumer decision into the analysis of consumer theory. Novel innovations to the field of consumer theory presented in the book include wealth-dependent ordinary demand, inter-temporal indirect utility function, wealth compensated demand, wealth expenditure function and inter-temporal Roy’s identity under uncertainty. One highlight of this book is the derivation of a series of stochastic dynamic Slutsky equations. New optimal consumption paradigms presented include:

– utility maximization in a dynamic framework, duality and wealth compensated demand, and dynamic Slutsky equations,
– dynamic consumption under random horizon and income,
– consumption amid uncertainties in income, life span and preferences, and
– stochastic future prices and consumption decision

The mathematical foundation of the book provides a fertile ground for the analysis of dynamic consumption under stochastic dynamic environments. The book paves the way for a new phase in optimal consumption analysis and will be of interest to economics and mathematics students, economists, mathematicians and researchers in consumer behaviour. (Imprint: Nova)

Preface

Foreword

About the Author

Chapter 1. Introduction

Chapter 2. Static Consumer Theory: A Review

Chapter 3. Discrete-time Dynamic Optimization

Chapter 4. Utility Maximization in Dynamic Framework

Chapter 5. Duality and Wealth Compensated Demand

Chapter 6. Dynamic Slutsky Equations

Chapter 7. Dynamic Consumption under Random Horizon and Uncertain Income

Chapter 8. Consumption Amid Uncertainties in Income, Life-span and Preferences

Chapter 9. Stochastic Future Prices and Consumption Decision

Afterword

List of Identities and Equations

References

Index

"As a researcher I found this book as a pioneering and fundamental work of dynamic consumer theory. There is no other work which goes as deeply into this field than this book. It is not only an excellent reference of the field, but Dr Yeung, as the leading researcher of this field, introduced many new developments and results, some of which were not published before." READ MORE... - Ferenc Szidarovszky, Professor, University of Pecs, Applied Mathematics Department, Hungary.

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The audiences of the book include graduate students in economics and mathematics; researchers in economics, consumer study, business and optimization; economists, financial planners, and applied mathematicians

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