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Baye Morgan Scholten (2006) - Information Search and Price Dispersion (view source)
Revision as of 20:39, 25 January 2010
, 20:39, 25 January 2010→Search Theoretic Models of Price Dispersion
'''A note on the derivation of demand'''
Recall that:<center><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>.Taking the derivitive with respect to <math>p\,</math>:
<center><math>\frac{d}{dp(v(M,p))}{dp} = \frac{dv(M,p)}{dm} \cdot \frac{dM}{dp} + \frac{dv}{dp} = 0,\,</math> where
<math>\frac{dM}{dp} = \frac{de(p,u)}{dp}\,</math>.
