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Baye Morgan Scholten (2006) - Information Search and Price Dispersion (view source)
Revision as of 20:32, 25 January 2010
, 20:32, 25 January 2010→Search Theoretic Models of Price Dispersion
'''A on the derivation of demand'''
Recall that <math>M=e(p,u)\,</math>, so that <math>v(e(p,u),p)=u\,</math> when the expenditure function is evaluated at <math>p\,</math> and <math>u\,</math>.:
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<math>M=e(p,u)\,</math>, so that <math>v(e(p,u),p)=u\,</math> when the expenditure function is evaluated at <math>p\,</math> and <math>u\,</math>. <math>d/dp(v(M,p)) = dv(M,p)/dm \cdot dM/dp + dv/dp = 0,\,</math>\\ where <math>dM/dp = de(p,u)/dp\,</math>.\\ <math>\therefore q(m,p) = de(p,u)/dp = -frac{dv/dp}{dv(M,p)/dm}\,</math>\\
<math>\therefore q(m,p) = -d/dp(v(p))\,</math>\\
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