The Holistic Theory Of The Consumer Market Demand

Abstract

The paper gives a brief presentation of the reconsideration of the neoclassical individual demand theory, which has occurred to be an inappropriate basis for constructing a collective market demand theory of practical interest. As consequences of this failure, the equilibrium theory created on this reductionistic basis does not reflect economic reality; and the theoretically developed economic approach to indexology is intended in statistical practice and other authors' literature for individuals or households. In the presented reconsideration of the reductionistic IDTh, the study's object is the "statistical ensemble of consumers" of a market observed through trade statistics. This ensemble's rationality is not an axiom, but a hypothesis being verified by the market statistics. These differences correspond to the general scientific character of our reconsideration of neoclassical individual demand theory, namely: objectivity, provability, and verifiability of facts. The rich mathematical and model apparatus of the IDTh has been conserved under the reconsideration. The obtained MDTh provides the economic legitimacy of the holistic equilibrium theory laid down by the works of Gustav Cassel and Abraham Wald, but until now rejected as a scientific direction of economic theory, as well as the "economic" approach in indexology, founded by Konüs, which takes into account consumer preferences to construct market demand's indexes.