UTILITY MAXIMIZATION OF BANGLADESHI CONSUMERS WITHIN THEIR BUDGET: A MATHEMATICAL PROCEDURE

Haradhan Kumar Mohajan

Abstract


A consumer is considered as a person or a group of people who uses purchased goods, products, or services only for personal use, and not for manufacturing or resale. Consumers usually purchase valuable and useful commodities or goods by spending all or partial of their income. The property of a commodity that enables it to satisfy human wants is called utility. Producers must be conscious to increase the utility among the consumers. This study has considered the maximization of utility problem of consumers of Bangladesh subject to two constraints; namely, budget constraint and coupon constraint. Consequently, in the study two Lagrange multipliers are used and interpreted these with mathematical analysis. Prediction of consumer behavior will help both producers and consumers to take decision of their future economic productions and consumptions, respectively. This article is ornamented with sufficient theorems and economic analyses. So that all the readers find interest when go through the economic analysis of utility maximization.

Keywords


Consumer satisfaction, Lagrange multipliers, utility maximization

Full Text:

PDF

References


Allen, G. D. (1934). The Nature of Indifference Curves. The Review of Economic Studies, 1(2), 110-121.

Alvino, L., Constantinides, E., & Franco, M. (2018). Towards a Better Understanding of Consumer Behavior: Marginal Utility as a Parameter in Neuromarketing Research. International Journal of Marketing Studies, 10(1), 90-106.

Bentham, J. (1780). An Introduction to the Principles of Morals and Legislation. CreateSpace Independent Publishing Platform.

Cassels, J. W. S. (1981). Economics for Mathematicians. Cambridge University Press.

Castro, L. C., & Araujo, A. S. (2019). Marginal Utility and its Diminishing Methods. International Journal of Tax Economics and Management, 2(6), 36-47.

Chisholm, H. (Ed.) (1911). Bentham Jeremy. Encyclopedia Britannica 3 (11th Ed.). Cambridge University Press.

Coleman, J. S. & Fararo, T. J. (1992). Rational Choice Theory. Nueva York: Sage.

Creswell, J. W. (2011). Research Design: Qualitative, Quantitative and Mixed Method Approaches (4th Ed.). Los Angeles: Sage Publications.

Dominick, S. (2008). Principles of Microeconomics. Oxford University Press, New Delhi.

Fishburn, P. C. (1970). Utility Theory for Decision Making. Huntington, NY: Robert E. Krieger.

Galiani, F. (1751). Della Moneta. Reprinted in: Collezioni Custodi Scrittori Classici Italiani di Economia Politica, 10.

Gauthier, D. (1975). Reason and Maximization. Canadian Journal of Philosophy, 4(3), 411-433.

Georgescu–Roegen, N. (1968). Utility, International Encyclopedia of the Social Sciences, Vol. 16. D. L. Sills (Ed.). New York: Macmillan and The Free Press.

Hicks, J. R. (1932). The Theory of Wages. Macmillan & Co., London.

Islam, J. N., Mohajan, H. K., & Moolio, P. (2009a). Preference of Social Choice in Mathematical Economics. Indus Journal of Management & Social Sciences, 3(1), 17-38.

Islam, J. N., Mohajan, H. K., & Moolio, P. (2009b). Political Economy and Social Welfare with Voting Procedure. KASBIT Business Journal, 2(1), 42-66.

Islam, J. N., Mohajan, H. K., & Moolio, P. (2010). Utility Maximization Subject to Multiple Constraints. Indus Journal of Management & Social Sciences, 4(1), 15-29.

Islam, J. N., Mohajan, H. K., & Moolio, P. (2011). Output Maximization Subject to a Nonlinear Constraint. KASBIT Business Journal, 4(1), 116-128.

Juster, F. T. (1990). Rethinking Utility Theory. The Journal of Behavioral Economics, 19(2), 155-179.

Kirsh, Y. (2017). Utility and Happiness in a Prosperous Society. Working Paper Series, No. 37-2017, Institute for Policy Analysis, The Open University of Israel.

Kothari, C. R. (2008). Research Methodology: Methods and Techniques (2nd Ed.). New Delhi: New Age International (P) Ltd.

Kubler, F., Selden, L, & Wei, X. (2014). Asset Demand Based Tests of Expected Utility Maximization. American Economic Review, 104(11), 3459-3480.

Lin, C.-C., & Peng, S,-S. (2019). The Role of Diminishing Marginal Utility in the Ordinal and Cardinal Utility Theories. Australian Economic Papers, 58(3), 233-246.

Marshall, A. (1881). Review of F. Y. Edgeworth’s Mathematical Psychics. The Academy, June 18, 1881.

McConnell, C. R., Brue, S. L., & Flynn, S. M. (2009). Economics: Principles, Problems, and Policies (8th Ed.). McGraw-Hill, Irwin, Boston.

Mill, J. S. (1848). Principles of Political Economy with Some of Their Applications to Social Philosophy. London: John W. Parker.

Mohajan, H. K. (2017a). Optimization Models in Mathematical Economics. Journal of Scientific Achievements, 2(5), 30-42.

Mohajan, H. K. (2017b). Analysis of Reciprocity and Substitution Theorems, and Slutsky Equation. Noble International Journal of Economics and Financial Research, 2(3), 54-75.

Mohajan, H. K. (2017c). Two Criteria for Good Measurements in Research: Validity and Reliability. Annals of Spiru Haret University Economic Series, 17(3), 58-82.

Mohajan, H. K. (2018). Qualitative Research Methodology in Social Sciences and Related Subjects. Journal of Economic Development, Environment and People, 7(1), 23-48.

Mohajan, H. K. (2020). Quantitative Research: A Successful Investigation in Natural and Social Sciences. Journal of Economic Development, Environment and People, 9(4), 52-79.

Mohajan, H. K. (2021a). Product Maximization Techniques of a Factory of Bangladesh: A Sustainable Procedure. American Journal of Economics, Finance and Management, 5(2), 23-44.

Mohajan, H. K. (2021b). Estimation of Cost Minimization of Garments Sector by Cobb-Douglass Production Function: Bangladesh Perspective. Annals of Spiru Haret University Economic Series, 21(2), 267-299.

Mohajan, H. K., Islam, J. N., & Moolio, P. (2013). Optimization and Social Welfare in Economics. Lambert Academic Publishing, Germany.

Moolio, P., Islam, J. N., & Mohajan, H. K. (2009). Output Maximization of an Agency. Indus Journal of Management and Social Sciences, 3(1), 39-51.

Moscati, J. (2013). Were Jevons, Menger and Walras Really Cardinalists? On the Notion of Measurement in Utility Theory, Psychology, Mathematics and other Disciplines, 1870-1910. History of Political Economy, 45(3), 373-414.

Pareto, V. (1906). Manuale di Economia Politica, con una Introduzione alla Scienza Sociale. Societa Editrice Libraria, Milano.

Polit, D. F., & Hungler, B. P. (2013). Essentials of Nursing Research: Methods, Appraisal, and Utilization (8th Ed.). Philadelphia: Wolters Kluwer/Lippincott Williams and Wilkins.

Read, D. (2004). Utility Theory from Jeremy Bentham to Daniel Kahneman. Working Paper No. LSEOR 04-64, London School of Economics and Political Science.

Roy, L., Molla, R., & Mohajan, H. K. (2021). Cost Minimization is Essential for the Sustainable Development of an Industry: A Mathematical Economic Model Approach. Annals of Spiru Haret University Economic Series, 21(1), 37-69.

Stigler, G. J. (1950). The Development of Utility Theory. I. Journal of Political Economy, 58(4), 307-327.

Strotz, R. (1953). Cardinal Utility. American Economic Review, 43(2), 384-397.

Swanson, R. A., & Holton, E. F. III. (Eds.) (2005). Research in Organizations: Foundations and Methods of Inquiry. SanFrancisco: Berrett-Koehler.

Waterfield, R. H. (Ed.) (1990). Conversations of Socrates by Xenophon. Penguin Classics, London.

Zhao, Q., Zhang, Y., & Friedman, D. (2017). Multi-Product Utility Maximization for Economic Recommendation. WSDM, 435-443.




DOI: https://doi.org/10.26458/jedep.v10i3.704

Refbacks

  • There are currently no refbacks.




Copyright (c) 2021 Haradhan Kumar Mohajan

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.


INDEXING

 

Environmental Science Journals,<br /> Natural Science Journals, SciTech Journals, Illustrata: Natural Science ICV 2015: 81.51DOAJREPEC   citefactor researcherid ECONBIZ ERIHPLUS     Sherpa" researchbib Gale Base    

Ulrichs     Stanford    

cornelniv    oclc     Toc     google
    ez3     ilinois sjif ohs 




Administred: Rocsana B. Manea Tonis

http://icourses.wix.com/itmk 

.