On the Microfoundation of Linear Oligopoly Demand

I. Bos*, D. Vermeulen

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

2 Citations (Web of Science)


We critically assess the representative consumer with quadratic aggregate utility function which forms the foundation of a well-known class of linear oligopoly demand structures. It is argued that this approach is problematic and redundant. Regarding the latter, we show how the same demand system can be derived directly from a population of heterogeneous buyers for any number of products. Welfare analyses based on aggregate demand is shown to be sensitive to the underlying microfoundation.
Original languageEnglish
Pages (from-to)1-15
Number of pages15
JournalB E Journal of Theoretical Economics
Issue number1
Publication statusPublished - 19 Jan 2022

JEL classifications

  • b40 - Economic Methodology: General
  • l10 - Market Structure, Firm Strategy, and Market Performance: General


  • microfoundations
  • oligopoly theory
  • product differentiation
  • representative consumer models

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