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function. If a consumer is inconsistent with GARP, we might need a measure for the severity of inconsistency. One widely used …
Persistent link: https://www.econbiz.de/10005561984
This work consists of two parts: First, it is shown that for a two-dimensional commodity space any homothetic utility function that rationalizes each pair of observations in a set of consumption data also rationalizes the entire set of observations. The result is stated as a pairwise version of...
Persistent link: https://www.econbiz.de/10010264708
This work consists of two parts: First, it is shown that for a two-dimensional commodity space any homothetic utility function that rationalizes each pair of observations in a set of consumption data also rationalizes the entire set of observations. The result is stated as a pairwise version of...
Persistent link: https://www.econbiz.de/10014221437
We derive necessary and sufficient conditions for a finite data set of price and demand observations to be consistent with an additively separable preference. We do so without imposing concavity on any of the subutility functions or convexity of the budget set a priori, thereby generalizing...
Persistent link: https://www.econbiz.de/10011817571
I propose a novel nonparametric method to empirically identify the degree of heterogeneity in individual preferences. Using preference information revealed by the observed behaviour, the method estimates interpersonal preference heterogeneity as the Kemeny distance between individual rankings...
Persistent link: https://www.econbiz.de/10014237023
The transferable utility hypothesis underlies important theoretical results in household economics. We provide a revealed preference framework for bringing this (theoretically appealing) hypothesis to observational data. We establish revealed preference conditions that must be satisfied for...
Persistent link: https://www.econbiz.de/10011674052
Revealed preference restrictions are increasingly used to bound demand responses and as shape restrictions in nonparametric estimation exercises. However, the restrictions imposed are not sufficient for rationality when predictions are made at more than a single price regime. We highlight the...
Persistent link: https://www.econbiz.de/10011307801
Consider an experiment in which subjects are asked to choose between pairs consisting of a monetary payment and a time-delay at which the payment is delivered. Given a finite set of observations, under what conditions the choices of an individual agent can be rationalised by a discounted utility...
Persistent link: https://www.econbiz.de/10014144883
We develop a nonparametric procedure, called the lattice method, for testing the consistency of contingent consumption data with a broad class of models of choice under risk and under uncertainty. Our method allows for risk loving and elation seeking behavior and can be used to calculate, via...
Persistent link: https://www.econbiz.de/10011671892
This work consists of two parts: First, it is shown that for a two-dimensional commodity space any homothetic utility function that rationalizes each pair of observations in a set of consumption data also rationalizes the entire set of observations. The result is stated as a pairwise version of...
Persistent link: https://www.econbiz.de/10005548378