A strictly-concave, non-spliced, Giffen-compatible utility function

- Giffen-compatible utility functions tend to be, in some way, problematic.
- A focus on the elasticities of the MRS helps in finding better functions of this type.
- We present a non-problematic Giffen-compatible utility function.
- Our function is not spliced and it conforms to conventional utility assumptions.

We propose a new bivariate utility function for the analysis of Giffen behavior. The function is strictly concave and twice continuously differentiable, with marginal utilities that are strictly positive. The function is defined by a single equation, rather than by two or more “spliced” functional forms. We contend that, in the search for Giffen-compatible utility functions, it is helpful to consider explicitly the elasticities of the consumer's marginal rate of substitution with respect to the quantities of the two goods.