See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/267642639

An Application of Ordinary Differential Equations in Economics: Modeling

Consumer's Preferences Using Marginal Rates of Substitution

Conference Paper · October 2014

DOI: 10.13140/2.1.1144.9288

CITATIONS READS

0 1,701

1 author:

Jorge Marques
University of Coimbra
10 PUBLICATIONS   1 CITATION   

SEE PROFILE

All content following this page was uploaded by Jorge Marques on 03 November 2014.

The user has requested enhancement of the downloaded file.

 An Application of Ordinary Differential Equations in Economics:
Modeling Consumer’s Preferences Using Marginal Rates of
Substitution
JORGE MARQUES
University of Coimbra
Faculty of Economics
Av. Dias da Silva 165, 3004-512 Coimbra
PORTUGAL
jmarques@fe.uc.pt

Abstract: The aim of this paper is to define consumer’s preferences from the differentiable point of view in the sense
of Debreu. In this setting we can consider a marginal rate of substitution to represent consumer’s preferences on the
space of two goods. By definition, for each point we have a vector that gives the direction orthogonal to an unknown
indifference curve. We solve a first order ordinary differential equation in order to determine the indifference
map. Our results are representation theorems for the following classes: linear, quasi-linear, separable, homothetic,
homothetic and separable. We show that this alternative approach is connected with the formulation concerning
the representability of preferences by smooth utility functions. Moreover, we deduce the general expression of
utility functions in the context of ordinal utility.

Key–Words: smooth preferences, marginal rates of substitution, differential equations, indifference map, ordinal
utility.

1 Introduction Georgescu-Roegen [7], Samuelson [19] with the pur-

In the context of ordinal utility, an individual con-
sumer is assumed to have a preference relation based
on axioms of rational decision, being represented by
a utility function. In general, a preference relation has
some properties that impose conditions on the regular-
ity of a utility function, such as continuity, differentia-
bility and convexity. Following an idea that goes as far
back as Antonelli [2] and Pareto [17], Debreu [6] and
Mas-Colell [15] have proposed that a smooth prefer-
ence relation can be represented by a vector field using
the Gauss map to indicate a direction of consumer’s
preferences.
In this paper, in line with Debreu’s work [6],
we will define a smooth preference relation on space
of two goods represented by a marginal rate of sub-
stitution. It was Hicks who introduced the concept
of marginal rate of substitution between two goods,
which is defined for every indifference set, as the in-
cremental amount of one good that the consumer is
willing to give up in order to gain an incremental in-
crease of consumption of other good. Further, Hicks
and Allen [10] showed that the principle of diminish-
ing marginal utility should be replaced by the princi-
ple of diminishing marginal rate of substitution. These
rates has been taken, for instance, by Antonelli [2],
pose of discussing the integrability of the demand
function.
In section 2 we introduce the concepts and the ba-
sic results of a smooth preference relation on space of
goods. In the neoclassical approach, it is represented
by a twice continuously differentiable utility function
with assumptions of monotony (no critical point) and
strict convexity. Taking into account that Pareto made
the discovery that a utility function is not necessary
a priori to explain the theory of consumer behavior,
so it can be dispensed in mathematical modeling ac-
cording to the principle of Occam’s razor. Hence,
we use a marginal rate of substitution to represent the
consumer’s preferences on each unknown indifference
curve. Geometrically, for each point we have a vector
that gives a direction orthogonal to the tangent line
of an indifference curve. In fact, this formulation is
based on the smoothness of indifference sets and does
not depend of the existence of a smooth utility repre-
sentation. We show that it is possible to deduce utility
functions. Moreover, it is shown the equivalence be-
tween both representations on space of goods.
In section 3 we establish sufficient conditions to
construct the indifference map on space of two goods.
It is enough to make differentiability assumptions on
a marginal rate of substitution to generate many of the
traditional results from the consumer’s preferences.
Hence, we show representation theorems for the fol-
lowing classes: linear, quasi-linear, separable, homo-
thetic, both homothetic and separable preferences. In
our approach, we represent first consumer’s prefer-
ences on each unknown indifference curve using a
marginal rate of substitution. Then we solve a first
order ordinary differential equation (ODE). Thereby
we obtain a functional form of one parameter fam-
ily of curves, written in the explicit way, that yields
the indifference map. Finally, we deduce the gen-
eral expression of utility functions in the context of
ordinal utility. Differential equations have been a
powerful tool, being used by Pareto [17], Hicks and
Allen [10], Leontief [13], Samuelson [18], Hurwicz
and Uzawa [11], Tyson [22] among others.
In section 4 we present final remarks to explain
that our results to characterize preferences on the
space of two goods can be generalized to the space
of n goods, n > 2.
2 Smooth Preferences
Let us study the mathematical formulation of smooth
preferences in the microeconomic theory, exclud-
ing from our analysis the revealed preference theory.
From the point of view of methodology we will re-
late two distinct approaches to represent consumer’s
preferences on the set of all bundles of two goods. In
the traditional approach it is defined a representation
that requires the determination of an arbitrary utility
function of class C 2 . In our approach it is consid-
ered a representation using an exchange rate between
two goods, called marginal rate of substitution, which
is independent of the notion of utility function. Fol-
lowing these alternative approaches, it is shown the
equivalence between both representations.
2.1 Representation of preferences by a utility
function
We introduce the basic concepts regarding preferences
and their representability by utility functions. The
neoclassical approach in the microeconomic theory
begins with the definition of consumer’s preference
relation. An individual consumer is assumed to have
a preference relation  on
Rn+ = {(x1 , . . . , xn ) ∈ Rn : xi > 0}
represented by a binary relation which satisfies three
axioms: reflexivity, transitivity and completeness.
From  we derive two other relations:  denotes
strict preference and ∼ denotes indifference. In addi-
tion, the axioms of continuity, monotonicity and strict
convexity are usually imposed on  in the differen-
tiable setting [15]. In the context of ordinal utility, a
utility function aims to construct a ranking of choices
based on the consumer’s preference relation.
Definition 1 Let  be a preference relation on Rn+ . A
real-valued function u : Rn+ → R is a utility function
if it a representation of  in the sense that
x  y ⇐⇒ u(x) ≥ u(y)
for all x ∈ Rn+ and y ∈ Rn+ .
We can say that every utility function is only deter-
mined up to strictly increasing transformations.
Proposition 2 Let g : R → R be a continuous strictly
increasing function. So u is a utility function if and
only if the composition U = g ◦ u is a utility function.
It was necessary to find conditions on utility functions
to describe a smooth preference relation. Debreu [6]
showed that there exists a monotonic utility function
of class C 2 with no critical point if and only if  sat-
isfies the following properties:
1. Continuity:  is closed in Rn+ × Rn+ ;
2. Monotonicity: x >> y implies x  y, where
x >> y means that xi > yi for all i = 1, . . . , n;
3. Smoothness: {(x, y) ∈ Rn+ × Rn+ : x ∼ y } is a
hypersurface of class C 2 .
In this sense, the indifference sets of u (or ) will be
hypersurfaces of class C 2 .
Definition 3 Let u be a utility function of class C 2 on
Rn+ and c ∈ R. The set
I = {(x1 , . . . , xn ) ∈ Rn+ : u(x1 , . . . , xn ) = c}
is closed in Rn+ . It is called an indifference hypersur-
face and the family of all indifference hypersurfaces is
called the indifference map.
Definition 4 [4] A preference relation  on Rn+ is
smooth if it is represented by a utility function u such
that:
(i) A function u is of class C 2 on Rn+ , that is, u and
its first and second order partial derivatives are
continuous on Rn+ ;
∂u
(ii) All first order partial derivatives of u, , are
∂xi
positive on Rn+ ;
(iii) The restriction of the quadratic form defined It is clear than (i*) is consequence of smoothness of
by the Hessian matrix of second order partial curves. The assumption (ii*) states that the compo-
derivatives of u, H(x), to the tangent hyperplane nents of v = (τ, 1) are positive and the assumption
at P ∈ I is negative definite. (iii*) expresses strict convexity of every indifference
curve I because its curvature at each point P is given
In this approach, once ensuring the existence of a ∂τ ∂τ
by τ (P ) (P ) − (P ).
known utility function, it is relatively easy to construct ∂y ∂x
the indifference map. Note that the marginal rate of substitution of X1 for
X2 is defined by
2.2 Representation of preferences by a dx 1
=− , for all (x, y) ∈ I . (2)
marginal rate of substitution dy τ (x, y)
Now suppose that a utility function of class C 2 is un-
When consumer’s preferences are locally integrable,
known. A smooth preference relation can be repre-
every marginal rate of substitution is also interpreted
sented by a vector field, following an idea that goes as
as the ratio between marginal utilities of two goods.
far back as Antonelli [2] and Pareto [17]. From now
on, we consider the space of two goods X1 and X2 : Proposition 6 If consumer’s preferences are locally
integrable on R2+ then there exists a utility function u
R2+ = {(x, y) ∈ R2 : x > 0 ∧ y > 0} .
such that
We present a weaker formulation based on the ∂u
∂x (x, y)
smoothness of indifference curves. In our approach τ (x, y) = ∂u
, for all (x, y) ∈ Vδ (P ).
we use a marginal rate of substitution to describe con- ∂y (x, y)
sumer’s preferences.
Proof: Suppose that the consumer’s preferences rep-
resented by τ on R2+ satisfy (1) in some neighborhood
Definition 5 Let I be an indifference curve on R2+ .
of given point P , Vδ (P ). Let I be an indifference
We say that τ is the marginal rate of substitution of
curve through P written in the differential form
X2 for X1 if there exists a function of class C 2 defined
by y = f (x) such that τ (x, y)dx + dy = 0 . (3)
dy By definition, λ(x, y) 6= 0 is an integrate factor for
= −τ (x, y) , for all (x, y) ∈ I . (1)
dx the equation (3) if
We say that the consumer’s preferences are locally in- λ(x, y)τ (x, y)dx + λ(x, y)dy = 0 (4)
tegrable on R2+ if (1) holds in some neighborhood of
each point P , Vδ (P ). is a total differential equation. Hence λ(x, y) is nec-
essarily solution of the following partial differential
The real valued function τ : R2+ → R+ is well defined equation
since y = f (x) can be identified with a smooth curve ∂λ ∂(λτ )
(x, y) = (x, y).
through the map h : R+ → R2+ , defined by h(x) = ∂x ∂y
(x, f (x)). Indeed, h is a local diffeomorphism, where Once it has been determined, there exists a function u
h−1 : R2+ → R+ is defined by h−1 (x, y) = x. Hence of class C 2 such that (4) is equivalent to du(x, z) = 0,
locally there exists a tangent line to I at each point P where
that has v = (τ, 1) as a normal vector. We remember
that Debreu [6] and Mas-Colell [15] have described ∂u ∂u
du(x, y) = (x, y)dx + (x, y)dy
a smooth preference relation in an analogous manner ∂x ∂y
using the Gauss map instead of τ .
In according to Hicks and Allen [10], it is assumed is the total differential of u(x, z). So
that τ has the following properties:
∂u ∂u
(x, y) = (λτ )(x, y) ∧ = λ(x, y)
(i*) Differentiability: τ is of class C1 on R2+ ; ∂x ∂y

(ii*) Positivity: τ is positive on R2+ ; hence we have

∂u
∂τ ∂τ ∂x (x, y)
(iii*) Convexity: −τ is negative on R2+ . τ (x, y) = ∂u
∂x ∂y ∂y (x, y)
for all (x, y) ∈ Vδ (P ). t
u Then y = f (x) is the unique solution of (1) since
We stress that marginal rates of substitution are ∂u
∂x (x, y)
independent of a utility function chosen to represent τ (x, y) = ∂u and thus consumer’s preferences
the consumer’s preference relation. ∂y (x, y)
are locally integrable on R2+ . t
u
Corollary 7 If consumer’s preferences are locally in-
tegrable on R2+ then for any utility function U we have
3 Representation of Smooth Prefer-
∂U
τ (x, y) = ∂x (x, y)
, for all (x, y) ∈ Vδ (P ). ences on R2+
∂U
∂y (x, y) Theorem 9 If consumer’s preferences are locally in-
Proof: Let I be an indifference curve on R2+ defined tegrable on R2+ and τ satisfies (i*), (ii*) and (iii*) then
by u(x, y) = c, where u is a utility function and c is for every indifference curve there exists a function f
a constant. By Proposition 2, there exists a function g defined by y = f (x) of class C 2 satisfying (1) which
strictly increasing such that U = g ◦ u. Applying the is strictly decreasing and strictly convex.
chain rule gives Proof: Let I be an indifference curve on R2+ .
∂U ∂u Suppose that consumer’s preferences are locally inte-
(x, y) = g 0 (u(x, y)) (x, y) grable on R2+ . It means that there exists a function of
∂x ∂x
class C 2 defined by y = f (x) satisfying (1). By hy-
and pothesis τ (x, y) > 0, we have f 0 (x) < 0 so that f is
∂U ∂u
(x, y) = g 0 (u(x, y)) (x, y) strictly decreasing. Using chain rule we obtain
∂y ∂y
that is, d2 y ∂τ ∂τ
∂U ∂u = − (x, y) + τ (x, y) (x, y) .
∂x (x, y) ∂x (x, y) dx2 ∂x ∂y
∂U
= ∂u
∂y (x, y) ∂y (x, y) Since τ satisfies (iii*), we have f 00 (x) > 0 so that f is
because uy (x, y) > 0 and Uy (x, y) > 0 and therefore strictly convex. t
u
by the Proposition 6 we obtain From the qualitative and analytical study of first
order ODE’s, the family of all indifference curves is
∂U
∂x (x, y) a partition of R2+ . It means that the indifference map
τ (x, y) = ∂U is the set of curves whose graphs are pairwise disjoint
∂y (x, y)
and have R2+ as their union. From Theorem 9 it fol-
for all (x, y) ∈ Vδ (P ). t
u lows that every indifference curve is the graph of a
We deduce a utility function from the marginal function f : D ⊂ R+ → R, defined by y = f (x), of
rate of substitution by Proposition 6. On the other class C 2 , positive, strictly decreasing and strictly con-
hand, we determine the marginal rate of substitution vex.
assuming that we know a utility function by the next We characterize the consumer’s preferences for the
proposition. following classes: linear, quasi-linear, separable, ho-
mothetic, homothetic and separable. Moreover, we
Proposition 8 If there exists a utility function u then deduce the general expression of utility functions in
the consumer’s preferences are locally integrable on the context of ordinal utility.
∂u
2 ∂x (x, y)
R+ where τ (x, y) = ∂u .
∂y (x, y) 3.1 Linear Preferences
Definition 10 Two goods X1 and X2 are called per-
Proof: Let I be an indifference hipersurface on R2+
fect substitutes if marginal rates of substitution are
defined by u(x, y) = c, where u is a utility function
∂u positive constants for all bundles.
and c is a constant. From (ii) we have (x, y) 6= 0,
∂y We say that consumer’s preferences are linear when
then by implicit function theorem u(x, y) = c has a the goods are perfect substitutes. These preferences
unique solution of the form y = f (x) in the neighbor- do not hold the assumption of strict convexity (iii*).
hood of each point P ∈ I, Vδ (P ), and the differentia-
tion of the u(x, f (x)) = c gives Proposition 11 Consumer’s preferences on R2+ are
∂u
linear if and only if the indifference map is represented
∂u ∂u dy dy ∂x (x, y) by a family of lines of the equation y = −kx + c,
(x, y) + (x, y) = 0 ⇐⇒ = − ∂u .
∂x ∂y dx dx ∂y (x, y) where k is a positive constant.
By Proposition 2 linear preferences are represented by
any utility function
U (x, y) = g(kx + y)
where g is strictly increasing and k > 0.
3.2 Quasi-Linear Preferences
Consumer’s preferences are said to be quasi-linear
with respect to Xi when the marginal rates of sub-
stitution do not depend of the quantity consumed of
Xi .
Definition 12 Consumer’s preferences on R2+ are
said to be:
(i) Quasi-linear with respect to X2 if there exists a
positive and strictly decreasing function η on R+
such that
τ (x, y) = η(x) , for all (x, y) ∈ R2+ ;
(ii) Quasi-linear with respect to X1 if there exists a
positive and strictly decreasing function φ on R+
such that
τ (x, y) = φ(y) , for all (x, y) ∈ R2+ .
Proposition 13 Consumer’s preferences on R2+ are
quasi-linear with respect to X2 if and only if the in-
difference map is represented by a family of curves of
equation y = c − F (x), where F is strictly increasing
and strictly concave.
Note that F 0 (x) = η(x), x > 0.
It is well known that these preferences admit a partic-
ular representation that is additive in the good X2 and
by Proposition 2 are represented by any utility func-
tion
U (x, y) = g (F (x) + y)
where g is strictly increasing and F is strictly increas-
ing and strictly concave.
Proposition 14 Consumer’s preferences on R2+
are
quasi-linear with respect to X1 if and only if the in-
difference map is represented by a family of curves of
equation y = F (c − x), where F is strictly increasing
and strictly convex.
dF −1 (y) 1 convex.
Note that = , y > 0.
dy φ(y)
It is well known that these preferences admit a partic-
ular representation that is additive in the good X1 and
by Proposition 2 are represented by any utility func-
tion
U (x, y) = g (x + H(y))
where g is strictly increasing and H = F −1 is strictly
increasing and strictly concave.
3.3 Separable Preferences
Definition 15 Consumer’s preferences on R2+ are
said to be separable if there exist a positive and
strictly decreasing function η and a positive and
strictly increasing φ on R+ such that
τ (x, y) = η(x)φ(y) , for all (x, y) ∈ R2+ .
According to the original Leontief-Sono definition of
separability [12], [20], the marginal rates of substitu-
tion between two goods are written in the multiplica-
tive form of the quantities of the goods.
Proposition 16 Consumer’s preferences on R2+ are
separable if and only if the indifference map is rep-
resented by a family of curves of equation y =
G (c − F (x)) where G is strictly increasing and
strictly convex and F is strictly increasing and strictly
concave.
dG−1 (y) 1
Note that F 0 (x) = η(x) and = .
dy φ(y)
By Proposition 2 separable preferences are repre-
sented by any utility function
U (x, y) = g (F (x) + H(y))
where g is strictly increasing, F and H = G−1 are
strictly increasing and strictly concave.
3.4 Homothetic Preferences
Definition 17 Consumer’s preferences on R2+ are
said to be homothetic if there exists a positive and
strictly increasing function h : R+ → R such that
y
τ (x, y) = h , for all (x, y) ∈ R2+ .
x
By definition, τ is a homogeneous function of degree
p = 0.
Proposition 18 Consumer’s preferences on R2+ are
homothetic if and only if the indifference map is
represented
by a family of curves of equation y =
xF ln ( xc ) where F is strictly increasing and strictly
y
Proof: We consider a new variable ν = . Since τ
x
is a homogeneous function of degree p = 0 we have
dy dν
τ (1, ν) = h(ν). Replacing dx = x dx + ν and y in (1)
we obtain a homogeneous ODE
dν
x = − (h(ν) + ν) . (5)
dx
The equation (5) is equivalent to a separable ODE The Proposition 19 states that both separable and
homothetic are precisely the preferences that admit
dν dx constant elasticity of substitution (CES) utility func-
=− . (6)
h(ν) + ν x tions. This positive constant is given by σ = 1/(1−δ).
It is well known that these preferences have a partic-
By integration gives ular representation which is homogeneous of degree
  c  p = 1.
xeH(y/x) = c ⇐⇒ y = xF ln We define Cobb-Douglas preferences taking a =
x
α/(1 − α) with 0 < α < 1 and δ = 0 in the Proposi-
dH 1 tion 19.
where = and F = H −1 . t
u
dν ν + h(ν)
By Proposition 2 homothetic preferences are rep- Definition 20 Consumer’s preferences on R2+ are
resented by any utility function said to be Cobb-Douglas if there exists a constant
 y
 0 < α < 1 such that
U (x, y) = g xeH ( x ) αy
τ (x, y) = , for all (x, y) ∈ R2+ .
(1 − α)x
where g is strictly increasing and H is strictly increas-
ing and strictly concave.
Proposition 21 Consumer’s preferences on R2+ are
Cobb-Douglas if and only if the indifference map
3.5 Separable and Homothetic Preferences is represented by a family of curves of equation
α
Proposition 19 Consumer’s preferences on R2+ are y = cx− 1−α .
separable and homothetic if and only if there exist
α
constants a > 0 and δ < 1 such that τ (x, y) = Note that we solve (5) with h(ν) = ν.
axδ−1 y 1−δ . 1−α
Taking into account the Proposition 2, the class of
Proof: We suppose that consumer’s preferences on Cobb-Douglas utility functions [5] is represented by
R2+ are separable, that is τ (x, y) = f (x)g(y). Its par- any
tial derivatives are given by U (x, y) = g(xα y 1−α )
where g is strictly increasing and 0 < α < 1.
∂τ ∂τ dg
(x, y) = f 0 (x)g(y) ∧ (x, y) = f (x) . (7) We define CES preferences taking a = α/(1−α) with
∂x ∂y dy 0 < α < 1 and δ 6= 0 in the Proposition 19.
We now suppose that consumer’s preferences are ho-
y Definition 22 Consumer’s preferences on R2+ are
mothetic. Considering a new variable ν = we have said to be CES if there exist constants 0 < α < 1
x
τ (1, ν) = h(ν) = f (1)g(ν). By Euler’s theorem we and δ < 1 such that
obtain
∂τ ∂τ α  y 1−δ
(1, ν) + ν (1, ν) = 0 . τ (x, y) = , for all (x, y) ∈ R2+ .
∂x ∂y 1−α x
Using (7) it follows
Proposition 23 Consumer’s preferences on R2+ are
f 0 (1) ν dg CES (δ 6= 0) if and only if the indifference map
=− . (8) is represented by a family of curves of equation
f (1) g(ν) dν 1/δ
c − αxδ

Since f is positive and strictly decreasing, there exists y= .
0 (1)
1−α
a constant δ < 1 such that δ = 1 + ff (1) . Solving the
α
separable equation (8) there exists a constant b > 0 Note that we solve (5) with h(ν) = ν 1/δ .
such that 1−α
By Proposition 2 the class of CES utility functions [3]
g(ν) = bν 1−δ .
is represented by any
Therefore we conclude that  
 y 1−δ U (x, y) = g (αxδ + (1 − α)y δ )1/δ
τ (x, y) = a = axδ−1 y 1−δ
x
where g is strictly increasing, 0 < α < 1 and 0 6= δ <
where a = f (1)b. t
u 1.
4 Final Remarks
We would like to remark the strength of our approach
as compared to the traditional (neoclassical) approach.
It is useful to define marginal rates of substitution as
slopes of indifference curves and interpreted them as
linear approximations to an unknown utility function.
From the well-defined marginal rate of substitution τ
we solve a first order ordinary differential equation
(ODE) in order to determine the indifference map for
consumer’s preferences on R2+ . Suppose that τ is pos-
itive, continuously differentiable and that holds the
convexity assumption, then the indifference map is a
set of strictly decreasing and strictly convex curves,
written in the explicit functional form. Thereby we
derive a utility representation for consumer’s prefer-
ences on R2+ .
In the particular case of two goods, the existence of
a utility function is guaranteed since an ordinary dif-
ferential equation (ODE) always admits an integrat-
ing factor. However, when there are more than two
goods it is only possible to find an integrating fac-
tor for a partial differential equation (PDE) provided
that it holds the integrability conditions. Hence, in
the general case we must deal with the integrability
issue of consumer’s preferences. It is closely related
with the question of the existence of a utility function,
known as the integrability problem in Economics (see
Samuelson [19]).
In the context of ordinal utility the consumer’s pref-
erences on the space of n goods (n > 2) can be rep-
resented by a vector field τ in which the components
are given by n − 1 marginal rates of substitution. As-
sume that Xn is a reference good and let I be an in-
difference hypersurface on Rn+ . We say that τ i is the
marginal rate of substitution of Xn for Xi if there ex-
ists a function of class C 2 defined by z = f (x) such
that
∇f (x) = −τ (x, z)
for all (x, z) = (x1 , x2 , . . . , xn−1 , z) ∈ I,
where
τ (x, z) = τ 1 (x, z), τ 2 (x, z), . . . , τ n−1 (x, z) . Sup-
pose that τ is continuously differentiable and that
holds the integrability conditions, then we can apply
a general method (Goursat, 1923) to solve a first or-
der system of PDE’s, which consists of the successive
integration of n − 1 ODE’s. Hence, it is possible to
determine the indifference map as a set of strictly de-
creasing (along the coordinate axes) and strictly con-
vex hypersurfaces, written in the explicit functional
form.
References:
[1] Allen, R. G. D. (1938). Mathematical Analysis
for Economists. London: Macmillan and Com-
pany Limited.
[2] Antonelli, G. (1886). Sulla teoria matematica
della economia politica. Pisa. [translated into
English, chap. 16, 333–360. In: Chipman et al.
(eds.) (1971). Preferences, Utility and Demand.
New York: Harcourt Brace Jovanovich].
[3] Arrow, K. J., Chenery, H. B., Minhas, B. S and
Solow, R. M. (1961). Capital-labor substitution
and economic efficiency. Review of Economics
and Statistics, 43 (3), 225–250.
[4] Balasko, Yves, (2009) The equilibrium mani-
fold: Postmodern Developments in the Theory
of General Economic Equilibrium, Cambridge
MA: The MIT Press.
[5] Cobb, C. W. and Douglas, P. H. (1928). A theory
of production. American Economic Review, 18
(1), 139–165.
[6] Debreu, G. (1972). Smooth preferences. Econo-
metrica, 40 (4), 603–615.
[7] Georgescu-Roegen, N. (1936). The pure theory
of consumer’s behavior. Quarterly Journal of
Economics, 50, 545–593.
[8] Goldman, S. M. and Uzawa, H. (1964). A Note
on Separability in Demand Analysis. Economet-
rica, 32 (3), 387–398.
[9] Goursat, E. (1923) Cours d’analyse
mathématique, Vol. II. Paris: Gauthier-Villars.
[10] Hicks, J. R. and Allen, G. D. (1934). A Recon-
sideration of the Theory of Value, II. Economica,
New Series, 1 (2), 196–219.
[11] Hurwicz, L. and Uzawa, H. (1971). On the prob-
lem of integrability of demand functions. In.
Chipman, J. S., et al. (Eds.), Preferences, Util-
ity and Demand. New York: Harcourt Brace Jo-
vanovich, 114–148.
[12] Leontief, W. W. (1947). A note on the interre-
lation of subsets of independent variables of a
continuous function with continuous first deriva-
tives. Bull. Amer. Math. Soc, 53 (4), 343–350.
[13] Leontief, W. W. (1947). Introduction to a theory
of the internal structure of functional relation-
ships. Econometrica, 15, 361–373.
[14] Lipsey, R. G., Chrystal, K. L. (2011). Eco-
nomics. 12th ed.. Oxford: Oxford University
Press.
[15] Mas-Colell, A. (1985). The theory of gen-
eral economic equilibrium: a differentiable
approach. Cambridge: Cambridge University
Press.
[16] Mas-Colell, A., Whinston, M.D., Green, J.R.
(1995) Microeconomic theory. New York: Ox-
ford University Press.
 [17] Pareto, V. (1909). Manuel D’Economie poli-
tique. Paris: V. Giard et E. Brière.
[18] Samuelson, P. A. (1948). Consumption Theory
in Terms of Revealed Preference. Economica,
New Series, 15 (60), 243–253.
[19] Samuelson, P. A. (1950). The Problem of Inte-
grability in Utility Theory. Economica, New Se-
ries, 17 (68), 355–385.
[20] Sono, M. (1945). The effect of price changes
on the demand and supply of separable goods
(in Japanese). Kokumin Keizai Zasshi, 74, 1–
51 [translated into English in International Eco-
nomic Review, 2, 1–51].
[21] Stigler GJ. (1950) The development of utility
theory: part 1 and 2. J Polit Econ; 58:307–27.
and 373–96.
[22] Tyson, J., (2013) Preference symmetries, partial
differential equations, and functional forms for
utility, Journal of Mathematical Economics, 49,
266–277

View publication stats