Technical Appendices

  • Chris Harris


We have described in section 4.4 the causes of shocks. We now need to consider changes to the utility and demand functions. There are four basic shocks to the utility and inverse demand (i.e., price on the vertical axis and demand on the horizontal) functions;
  1. 1.

    Upward arithmetic (parallel shifts)

  2. 2.

    Upward geometric (parallel shifts of the logarithm)

  3. 3.

    Rightward arithmetic

  4. 4.

    Rightward geometric



Risk Aversion Inequality Aversion Absolute Risk Aversion Theil Index Technical Appendix 
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  1. 2.
    See Harris (2015), Peak Load and Capacity Pricing: Theory and Practice in Electricity (Palgrave).CrossRefGoogle Scholar
  2. 4.
    Drägulescu and Yakuvenko (2001), “Exponential and Power-Law Probability Distributions of Wealth and Income in the United Kingdom and the United States,” Physica 299: 213–21.CrossRefGoogle Scholar
  3. 5.
    Pareto (1897), Cours d’Economie Politique (Paris, France: Librairie De l’Université Lausanne), noted the fit to his distribution.Google Scholar

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© Chris Harris 2015

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  • Chris Harris

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