Afriat (1967) showed the equivalence of the strong axiom of revealed preference and the existence of a solution to a set of linear inequalities. From this solution he constructed a utility function rationalizing the choices of a competitive consumer. We extend Afriat's theorem to a class of...

We identify a natural counterpart of the standard GARP for demand data in which goods are all indivisible. We show that the new axiom (DARP, for “discrete axiom of revealed preference”) is necessary and sufficient for the rationalization of the data by a well-behaved utility function. Our...

Whether observed differences in redistributive policies across countries are the result of differences in social preferences or efficiency constraints is an important question that paves the debate about the optimality of welfare regimes. To shed new light on this question, we estimate labor...

Many economists believe that the stock market plays an important role in efficiently allocating capital to its most productive uses. This standard story of the stock market was called into question by events in the late 1990s, when some observers believed that stock market overvaluation – or a...

We experimentally investigate behavior and beliefs in a sequential prisoner's dilemma. Each subject had to choose an action as first mover and a conditional action as second mover. All subjects also had to state their beliefs about others' second-mover choices. Using these elicited beliefs, we...

The completeness axiom of choice has been questioned for long, and in response, theoretical models of decision making allowing for incomplete preferences have been developed. So far the theoretical accomplishments have however not been paired with empirical evidence on the actual existence of...

A nudge is a non-coercive paternalistic intervention that attempts to improve choices by manipulating the framing of a decision problem. As any paternalism, it faces the difficulty of determining the appropriate welfare criterion. We propose a welfare-theoretic foundation for nudging similar in...

Pension systems have recently been under scrutiny because of the expected population ageing threatening its sustainability. This paper’s contribution to the debate is from a political economic perspective as it uses data from a Choice Experiment to investigate individual preferences for an...

We consider the aggregation of individual agents' von Neumann-Morgenstern preferences over lotteries into a social planner's von Neumann-Morgenstern preference. We start from Harsanyi's axiomatization of utilitarianism, and ask under which conditions a social preference order that satisfies...

Pension systems have recently been under scrutiny because of the expected population ageing threatening its sustainability. This paper’s contribution to the debate is from a political economic perspective as it uses data from a Choice Experiment to investigate individual preferences for an...