Alfred Marshall's Cardinal Theory of Value: The Strong Law of Demand

descriptionPublicationkeyboard_double_arrow_right Article , Preprint , Other literature type 01 Jan 2013 English Publisher:Elsevier BVJournal:SSRN Electronic Journal (eissn: 1556-5068,

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Authors: Donald J. Brown; Caterina Calsamiglia;

doi: 10.2139/ssrn.2302613 , 10.1007/s40505-014-0029-5

Alfred Marshall's Cardinal Theory of Value: The Strong Law of Demand

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Abstract

We show that all the fundamental properties of competitive equilibrium in Marshall's cardinal theory of value, as presented in Note XXI of the mathematical appendix to his Principles of Economics (1890), derive from the Strong Law of Demand. That is, existence, uniqueness, optimality, and global stability of equilibrium prices with respect to tatonnement price adjustment follow from the cyclical monotonicity of the market demand function in the Marshallian general equilibrium model.

Related Organizations

Autonomous University of Barcelona
Spain
Cowles Foundation
United States
Yale University
United States

Keywords

Cardinal utility, Quasilinear utility, Cyclical monotonicity, jel: jel:D51, jel: jel:B13, jel: jel:D11

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