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Afriat’s theorem for indivisible goods

Listed author(s):
  • Forges, Françoise
  • Iehlé, Vincent

We identify a natural counterpart of the standard GARP for demand data in which goods are all indivisible. We show that the new axiom (DARP, for “discrete axiom of revealed preference”) is necessary and sufficient for the rationalization of the data by a well-behaved utility function. Our results complement the main finding of Polisson and Quah (2013), who rather minimally modify the original consumer problem with indivisible goods so that the standard GARP still applies.

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File URL: http://www.sciencedirect.com/science/article/pii/S0304406814000913
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Article provided by Elsevier in its journal Journal of Mathematical Economics.

Volume (Year): 54 (2014)
Issue (Month): C ()
Pages: 1-6

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Handle: RePEc:eee:mateco:v:54:y:2014:i:c:p:1-6
DOI: 10.1016/j.jmateco.2014.08.001
Contact details of provider: Web page: http://www.elsevier.com/locate/jmateco

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  1. Varian, Hal R, 1982. "The Nonparametric Approach to Demand Analysis," Econometrica, Econometric Society, vol. 50(4), pages 945-973, July.
  2. A. Fostel & H. Scarf & M. Todd, 2004. "Two new proofs of Afriat’s theorem," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 24(1), pages 211-219, 07.
  3. Sam Cosaert & Thomas Demuynck, 2015. "Revealed preference theory for finite choice sets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 59(1), pages 169-200, May.
  4. Forges, Françoise & Minelli, Enrico, 2009. "Afriat's theorem for general budget sets," Journal of Economic Theory, Elsevier, vol. 144(1), pages 135-145, January.
  5. Philippe Février & Michael Visser, 2004. "A Study of Consumer Behavior Using Laboratory Data," Experimental Economics, Springer;Economic Science Association, vol. 7(1), pages 93-114, February.
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  7. Jozsef Sakovics, 2012. "Revealed cardinal preference," ESE Discussion Papers 212, Edinburgh School of Economics, University of Edinburgh.
  8. Varian, Hal R., 1990. "Goodness-of-fit in optimizing models," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 125-140.
  9. Satoru Fujishige & Zaifu Yang, 2012. "On Revealed Preference and Indivisibilities," Discussion Papers 12/02, Department of Economics, University of York.
  10. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680, April.
  11. Mattei, Aurelio, 2000. "Full-scale real tests of consumer behavior using experimental data," Journal of Economic Behavior & Organization, Elsevier, vol. 43(4), pages 487-497, December.
  12. repec:spo:wpecon:info:hdl:2441/5rkqqmvrn4tl22s9mc0o6ctj2 is not listed on IDEAS
  13. Matthew Polisson & John K.-H. Quah, 2013. "Revealed Preference in a Discrete Consumption Space," American Economic Journal: Microeconomics, American Economic Association, vol. 5(1), pages 28-34, February.
  14. Chambers, Christopher P. & Echenique, Federico, 2009. "Supermodularity and preferences," Journal of Economic Theory, Elsevier, vol. 144(3), pages 1004-1014, May.
  15. Ivar Ekeland & Alfred Galichon, 2013. "The housing problem and revealed preference theory: duality and an application," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 54(3), pages 425-441, November.
  16. Donald Brown & Caterina Calsamiglia, 2007. "The Nonparametric Approach to Applied Welfare Analysis," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 31(1), pages 183-188, April.
  17. Françoise Forges & Vincent Iehlé, 2013. "Essential data, budget sets and rationalization," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 54(3), pages 449-461, November.
  18. Hammond, Peter & Traub, Stefan, 2012. "A Three-Stage Experimental Test of Revealed Preference," CAGE Online Working Paper Series 72, Competitive Advantage in the Global Economy (CAGE).
  19. repec:dau:papers:123456789/9256 is not listed on IDEAS
  20. W. E. Diewert, 1973. "Afriat and Revealed Preference Theory," Review of Economic Studies, Oxford University Press, vol. 40(3), pages 419-425.
  21. repec:dau:papers:123456789/4099 is not listed on IDEAS
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