Recent research has shown that small deviations from optimizing behavior can have substantial effects on economic equilibria. Nonoptimizing demand behavior is of particular importance since individual consumer expenditure data often violate the strong axiom of revealed preference, and since the...

If a smooth consumer demand function violates the strong axiom of revealed preference, then income and prices can follow a cycle and return to their starting values even though real income has always risen. We show how real income growth along the "worst" revealed preference cycle depends on the...

If a smooth demand function violates the strong axiom of revealed preference, the income and prices can follow a cycle and returm to their starting values even though real income is always rising. We show how real income growth along the “worst” revealed preference cycle depends on the range...

A smooth demand function is generated by utility maximization if and only if its Slutsky matrix is symmetric and negative semidefinite. Slutsky symmetry is equivalent to absence of smooth revealed preference cycles, cf. Hurwicz and Richter (Econometrica 1979). To observe such a cycle would...

We define measures of violations of Slutsky symmetry and negative semidefiniteness and relate them to measures of revealed preference inconsistencies exhibited by nonoptimizing demand behavior. The degree of Slutsky asymmetry is shown to restrict the rate at which real income can rise everywhere...