RECOVERY OF THE CONSUMER MULTIATTRIBUTIVE UTILITY MAXIMIZATION PROBLEM

Abstract

This article contains a prediction model for the demand for the consumer commodities. I consider the classical model of the consumer utility function maximization in a given budget constraint where there are two products: the first one for which the demand is being estimated, and the rest of the consumption bundle which is the second product. The utility function is introduced as multiattributive utility function with an unidentified number of attributes. An approach to estimate the exact number of attributes and the parameters of the model in a given class of utility functions for each attribute was proposed. The estimation is derived through the optimization of corrected Akaike information criterion, where the parameters of the utility function are continuous and the number of attributes is integer and positive. This model was tested on the prediction of the homogenous product demand with the Giffen effect