This paper proposes new power indices for revealed preference tests. The indices are based on a model of irrational consumption behavior where the consumer randomly allocates a certain fraction of expenditure. The methods allow a researcher to trace out the entire power curve against random...

Focusing on the testable revealed preference restrictions on the equilibrium manifold, we show that the rationalizability problem is NP-complete. Subsequently, we present a mixed integer programming (MIP) approach to characterize the testable implications of general equilibrium models....

We recover approximate parametric preferences from consistent and inconsistent consumer choices. The procedure seeks to utilize revealed preference information contained in choices by minimizing its ranking inconsistency with the proposed parametric preferences. We provide a novel...

We provide two new, simple proofs of Afriat’s celebrated theorem stating that a finite set of price-quantity observations is consistent with utility maximization if, and only if, the observations satisfy a variation of the Strong Axiom of Revealed Preference known as the Generalized Axiom of...