A Multi-Lognormal Demand Model for Oligopolistic Markets

The demand model discussed in this paper has a sigmoid shape and its independent variables are log transformations of market prices instead of incomes as is more customary. The essential element of this model is a psychological variable, the “tolerance price”, which we may loosely define as that price level in correspondence to which the consumer refrains from buying the commodity in question. The ratio between this psychological variable and market prices determines actual demand. An empirical application to an oligopolistic market is successfully tried out.