Echenique, Federico; Lee, Sangmok; Shum, Matthew - In: Journal of Political Economy 119 (2011) 6, pp. 1201-1201
We introduce a measure of the severity of violations of the revealed preference axioms, the money pump index (MPI). The MPI is the amount of money one can extract from a consumer who violates the axioms. It is also a statistical test for the hypothesis that a consumer is rational when behavior...