The Housing Problem and Revealed Preference Theory : Duality and an application
AbstractThis 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 preference problem is connected to an optimal assignment problem, and a geometrical characterization of the rationalizability of experiment data is given. This allows in turn to give new indices of rationalizability of the data and to define weaker notions of rationalizability, in the spirit of Afriat’s efficiency index.
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Bibliographic InfoPaper provided by Sciences Po in its series Sciences Po publications with number info:hdl:2441/5rkqqmvrn4tl22s9mc0o6ctj2.
Date of creation: Oct 2012
Date of revision:
Publication status: Published in Economic Theory (2012) v.51 , p.1-17
Find related papers by JEL classification:
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
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- Forges, Françoise & Minelli, Enrico, 2009.
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- repec:ner:dauphi:urn:hdl:123456789/4099 is not listed on IDEAS
- Diewert, W E, 1973. "Afriat and Revealed Preference Theory," Review of Economic Studies, Wiley Blackwell, vol. 40(3), pages 419-25, July.
- Matzkin, Rosa L, 1991. "Axioms of Revealed Preference for Nonlinear Choice Sets," Econometrica, Econometric Society, vol. 59(6), pages 1779-86, November.
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