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Revealed differences

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  • Castillo, Marco
  • Freer, Mikhail

Abstract

Two individuals are said to be revealed different if their joint decisions are more distant from rationality than either of their individual decisions taken separately. We show that the revealed different relation can be used to identify preference types and therefore to evaluate the heterogeneity of preferences in a completely nonparametric way. Using experimental data from a random sample of the Dutch population, we find that 1182 individuals can be divided into 131 different preference types, men's preferences are more heterogeneous than and different from women's preferences. These results replicate in a different decision environment.

Suggested Citation

  • Castillo, Marco & Freer, Mikhail, 2018. "Revealed differences," Journal of Economic Behavior & Organization, Elsevier, vol. 145(C), pages 202-217.
  • Handle: RePEc:eee:jeborg:v:145:y:2018:i:c:p:202-217
    DOI: 10.1016/j.jebo.2017.10.017
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    References listed on IDEAS

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    More about this item

    Keywords

    Rational behavior; Heterogeneity of preferences;

    JEL classification:

    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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