Showing 1 - 10 of 150
Many studies document failures of expected utility's key assumption, the independence axiom. Here, we show that independence can be decomposed into two distinct axioms - betweenness and homotheticity - and that these two axioms are necessary and sufficient for independence. Thus, independence...
Persistent link: https://www.econbiz.de/10011282512
We define necessary and sufficient conditions on prices and incomes under which quantity choices can violate SARP (Strong Axiom of Revealed Preference) but not WARP (Weak Axiom of Revealed Preference). As SARP extends WARP by additionally imposing transitivity on the revealed preference...
Persistent link: https://www.econbiz.de/10012010051
This paper exhibits a duality between the theory of revealed preference of Afriat and the housing allocation problem of Shapley and Scarf. In particular, it is shown that Afriat’s theorem can be interpreted as a second welfare theorem in the housing problem. Using this duality, the revealed...
Persistent link: https://www.econbiz.de/10010812567
We review a nonparametric "revealed preference" methodology for analyzing collective consumption behavior in practical applications. The methodology allows for accounting for externalities, public consumption, and the use of assignable quantity information in the consumption analysis. This...
Persistent link: https://www.econbiz.de/10010990811
This paper exhibits a duality between the theory of revealed preference of Afriat and the housing allocation problem of Shapley and Scarf. In particular, it is shown that Afriat’s theorem can be interpreted as a second welfare theorem in the housing problem. Using this duality, the revealed...
Persistent link: https://www.econbiz.de/10011074076
Many studies document failures of expected utility’s key assumption, the independence axiom. Here, we show that independence can be decomposed into two distinct axioms – betweenness and homotheticity – and that these two axioms are necessary and sufficient for independence. Thus,...
Persistent link: https://www.econbiz.de/10011074871
This paper develops a model of choice that embeds some psychological aspects affecting decision maker's behaviour. In the model, the decision maker attaches an unobservable psychological index -representing, e.g., the level of perceived availability or the level of salience- to each alternative...
Persistent link: https://www.econbiz.de/10005106390
Afriat proved the equivalence of a variant 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...
Persistent link: https://www.econbiz.de/10008551679
Afriat proved the equivalence of a variant 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...
Persistent link: https://www.econbiz.de/10010706621
This paper exhibits a duality between the theory of revealed preference of Afriat and the housing allocation problem of Shapley and Scarf. In particular, it is shown that Afriat’s theorem can be interpreted as a second welfare theorem in the housing problem. Using this duality, the revealed...
Persistent link: https://www.econbiz.de/10010756474