Morgenstern’s article is a foundational critique of ordinary demand theory. It begins from the apparently secure distinction between individual and collective demand, but argues that the usual curve is misunderstood when it is treated as a path along which buyers move through time. A demand curve is first a schedule of mutually exclusive intentions at a given moment, not a record of successive purchases after prices change.
Die Theorie der individuellen und der kollektiven Nachfrage hält man im allgemeinen für festbegründet.
English translation: The theory of individual and collective demand is generally regarded as firmly established.
The analysis of the individual curve emphasizes saturation, discontinuities, and the difference between marginal and intramarginal demand. Morgenstern’s central point is temporal: the buyer’s bids are alternatives. If one transaction is realized, the remaining points of the original curve no longer have the same meaning, because expenditure, possession, and the buyer’s subsequent situation have changed.
Das Individuum drückt seine Bereitschaft aus, in einem gegebenen Zeitpunkt entweder die eine oder irgendeine andere der sonstigen Quantitäten zu ihren entsprechenden Geldpreisen zu kaufen.
English translation: The individual expresses his willingness, at a given point in time, to buy either the one quantity or any of the other quantities at their corresponding money prices.
This leads to the article’s most important correction. A demand curve of one variable is valid for only one use, unless it is reconstructed. Later purchases after a price fall must be described by a reaction function, not by simply reading another point from the old curve. Thus elasticity, short-run price response, and empirical demand estimation become problematic whenever observed points are really successive transactions rather than simultaneous alternatives.
Eine individuelle Nachfragekurve einer Variablen ist dann, ganz gleich, welches ihre Form ist, gültig nur für eine einzige Verwendung, d. h. für eine Transaktion.
English translation: An individual demand curve of a single variable is then, whatever its shape, valid only for one single use, that is, for one transaction.
The same argument applies more strongly to collective demand. Aggregation can be a first approximation, but it hides the number of buyers, their individual schedules, and their changed positions after trade. The same market curve may correspond to many different individual structures, so its slope cannot by itself reveal how the market will react after actual transactions. Morgenstern therefore criticizes recontracting as an elegant fiction: it suppresses the sequential problem by cancelling earlier trades until equilibrium is reached.
His applications to monopoly, discrimination, monopolistic competition, cobweb adjustment, and supply all develop this claim. Market splitting, price discrimination, and dynamic adjustment require information about individual buyers and strategic responses that an aggregate curve does not contain. The article’s broader significance is its early movement from static price curves toward a game-theoretic view of markets as changing strategic situations.
Die Theorie der Spiele, die die Natur dieser Situation auf einem gewissen grundlegenden Gebiet gezeigt hat, bietet eine Methode, die Schwierigkeit zu überwinden.
English translation: The theory of games, which has revealed the nature of this situation within a certain fundamental domain, offers a method for overcoming the difficulty.
Morgenstern does not discard demand curves, but restricts their legitimate use. They are meaningful only when their temporal period, independence assumptions, and strategic setting are specified. His “new theory” is therefore less a replacement curve than a demand theory disciplined by time, transaction, and interdependence.
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