A revealed preference test for weakly separable preferences
AbstractConsider a finite data set of price vectors and consumption bundles; under what conditions will there be a weakly separable utlity function that rationalizes the data?� This paper shows that rationalization in this sense is possible if and only if there exists a preference order on some finite set of consumption bundles that is consistent with the observations and that is weakly separable.� Since there can only be a finite number of preference orders on this set, the problem of rationalization with a weakly separable utility function is solvable.
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Bibliographic InfoPaper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 601.
Date of creation: 01 Apr 2012
Date of revision:
Afriat's theorem; Concave utility function; Budget set; Generalized axiom of revealed preference; Preorder;
Find related papers by JEL classification:
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-02 (All new papers)
- NEP-MIC-2012-05-02 (Microeconomics)
- NEP-UPT-2012-05-02 (Utility Models & Prospect Theory)
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