Linear Demand Systems are Inconsistent with Discrete Choice

Sonia Jaffe 1 , 1  and E. Glen Weyl 2 , 2
  • 1 Harvard University, sjaffe@fas.harvard.edu
  • 2 Harvard University, weyl@fas.harvard.edu

We show that with more than two options, a discrete choice model cannot generate linear demand. In doing so, we demonstrate a prediction of such discrete choice models that is falsifiable based on local second-order properties of demand.

Purchase article
Get instant unlimited access to the article.
$42.00
Log in
Already have access? Please log in.


Journal + Issues

The B.E. Journal of Theoretical Economics (BEJTE) is a leading venue for top-notch economic theory, both pure and applied. Topics include contract theory, decision theory, game theory, general equilibrium theory, and mechanism design both pure and applied to such areas as industrial organization, public finance, labor and law and economics.

Search