IDEAS home Printed from https://ideas.repec.org/a/kap/theord/v96y2024i1d10.1007_s11238-023-09943-x.html
   My bibliography  Save this article

The leveling axiom

Author

Listed:
  • Alvaro Sandroni

    (Northwestern University)

  • Leo Katz

    (University of Pennsylvania Law School)

Abstract

We characterize general constraints under which rational choices are characterized by asymmetric revealed preferences. A key feature of our main characterization result is expressed by the leveling axiom. We also consider the special case of a law-abiding decision maker who chooses optimally among legal options. We show that the law does not necessarily satisfy the leveling axiom and, therefore, transitivity adds empirical content to law-abiding choices.

Suggested Citation

  • Alvaro Sandroni & Leo Katz, 2024. "The leveling axiom," Theory and Decision, Springer, vol. 96(1), pages 135-152, February.
    • Handle: RePEc:kap:theord:v:96:y:2024:i:1:d:10.1007_s11238-023-09943-x
    DOI: 10.1007/s11238-023-09943-x
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11238-023-09943-x
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11238-023-09943-x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. John Quah, 2006. "Weak axiomatic demand theory," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 29(3), pages 677-699, November.
    2. Christopher Tyson, 2013. "Behavioral implications of shortlisting procedures," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 41(4), pages 941-963, October.
    3. Ariel Rubinstein & Yuval Salant, 2012. "Eliciting Welfare Preferences from Behavioural Data Sets," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(1), pages 375-387.
    4. Paola Manzini & Marco Mariotti, 2007. "Sequentially Rationalizable Choice," American Economic Review, American Economic Association, vol. 97(5), pages 1824-1839, December.
    5. Marco Mariotti, 2008. "What kind of preference maximization does the weak axiom of revealed preference characterize?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 35(2), pages 403-406, May.
    6. Philip J. Reny, 2015. "A Characterization of Rationalizable Consumer Behavior," Econometrica, Econometric Society, vol. 83, pages 175-192, January.
    7. , & ,, 2012. "Reason-based choice: a bargaining rationale for the attraction and compromise effects," Theoretical Economics, Econometric Society, vol. 7(1), January.
    8. Chambers,Christopher P. & Echenique,Federico, 2016. "Revealed Preference Theory," Cambridge Books, Cambridge University Press, number 9781107087804, October.
    9. Richard Blundell & Martin Browning & Laurens Cherchye & Ian Crawford & Bram De Rock & Frederic Vermeulen, 2015. "Sharp for SARP: Nonparametric Bounds on Counterfactual Demands," American Economic Journal: Microeconomics, American Economic Association, vol. 7(1), pages 43-60, February.
    10. Hugh Rose, 1958. "Consistency of Preference: The Two-Commodity Case," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 25(2), pages 124-125.
    11. Leo Katz & Alvaro Sandroni, 2023. "Circumvention of Law and the Hidden Logic behind It," The Journal of Legal Studies, University of Chicago Press, vol. 52(1), pages 51-81.
    12. , & ,, 2006. "A model of choice from lists," Theoretical Economics, Econometric Society, vol. 1(1), pages 3-17, March.
    13. Matzkin, Rosa L. & Richter, Marcel K., 1991. "Testing strictly concave rationality," Journal of Economic Theory, Elsevier, vol. 53(2), pages 287-303, April.
    14. Hiroki Nishimura & Efe A. Ok & John K.-H. Quah, 2017. "A Comprehensive Approach to Revealed Preference Theory," American Economic Review, American Economic Association, vol. 107(4), pages 1239-1263, April.
    15. Houy Nicolas, 2007. "Rationality and Order-Dependent Sequential Rationality," Theory and Decision, Springer, vol. 62(2), pages 119-134, March.
    16. Horan, Sean, 2016. "A simple model of two-stage choice," Journal of Economic Theory, Elsevier, vol. 162(C), pages 372-406.
    17. Kfir Eliaz & Ran Spiegler, 2011. "Consideration Sets and Competitive Marketing," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 78(1), pages 235-262.
    18. B. Douglas Bernheim & Antonio Rangel, 2009. "Beyond Revealed Preference: Choice-Theoretic Foundations for Behavioral Welfare Economics," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(1), pages 51-104.
    19. Timothy K. M. Beatty & Ian A. Crawford, 2011. "How Demanding Is the Revealed Preference Approach to Demand?," American Economic Review, American Economic Association, vol. 101(6), pages 2782-2795, October.
    20. Cherchye, Laurens & Demuynck, Thomas & De Rock, Bram, 2018. "Transitivity of preferences: when does it matter?," Theoretical Economics, Econometric Society, vol. 13(3), September.
    21. Au, Pak Hung & Kawai, Keiichi, 2011. "Sequentially rationalizable choice with transitive rationales," Games and Economic Behavior, Elsevier, vol. 73(2), pages 608-614.
    22. Cherchye, Laurens & Demuynck, Thomas & De Rock, Bram, 2018. "Transitivity of preferences: when does it matter?," Theoretical Economics, Econometric Society, vol. 13(3), September.
    23. Border Kim C. & Segal Uzi, 1994. "Dynamic Consistency Implies Approximately Expected Utility Preferences," Journal of Economic Theory, Elsevier, vol. 63(2), pages 170-188, August.
    24. Jan Heufer, 2014. "A geometric approach to revealed preference via Hamiltonian cycles," Theory and Decision, Springer, vol. 76(3), pages 329-341, March.
    25. Richter, Michael & Rubinstein, Ariel, 2020. "The permissible and the forbidden," Journal of Economic Theory, Elsevier, vol. 188(C).
    26. Yusufcan Masatlioglu & Elchin Suleymanov, 2021. "Decision making within a product network," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(1), pages 185-209, February.
    27. Yaron Azrieli & Christopher P. Chambers & Paul J. Healy, 2018. "Incentives in Experiments: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 126(4), pages 1472-1503.
    28. Sen, Amartya K, 1977. "Social Choice Theory: A Re-examination," Econometrica, Econometric Society, vol. 45(1), pages 53-89, January.
    29. Aguiar, Victor H. & Hjertstrand, Per & Serrano, Roberto, 2020. "A Rationalization of the Weak Axiom of Revealed Preference," Working Paper Series 1321, Research Institute of Industrial Economics.
    30. repec:dau:papers:123456789/4099 is not listed on IDEAS
    31. Peters Hans & Wakker Peter, 1994. "WARP Does Not Imply SARP for More Than Two Commodities," Journal of Economic Theory, Elsevier, vol. 62(1), pages 152-160, February.
    32. Bossert, Walter, 1993. "Continuous Choice Functions and the Strong Axiom of Revealed Preference," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 3(2), pages 379-385, April.
    33. Kfir Eliaz & Debraj Ray & Ronny Razin, 2006. "Choice Shifts in Groups: A Decision-Theoretic Basis," American Economic Review, American Economic Association, vol. 96(4), pages 1321-1332, September.
    34. Leo Katz & Alvaro Sandroni, 2017. "The Inevitability and Ubiquity of Cycling in All Feasible Legal Regimes: A Formal Proof," The Journal of Legal Studies, University of Chicago Press, vol. 46(2), pages 237-280.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cherchye, Laurens & Demuynck, Thomas & De Rock, Bram, 2018. "Transitivity of preferences: when does it matter?," Theoretical Economics, Econometric Society, vol. 13(3), September.
    2. Wilfried Youmbi, 2024. "Nonparametric Analysis of Random Utility Models Robust to Nontransitive Preferences," Papers 2406.13969, arXiv.org.
    3. Aguiar, Victor H. & Hjertstrand, Per & Serrano, Roberto, 2020. "A Rationalization of the Weak Axiom of Revealed Preference," Working Paper Series 1321, Research Institute of Industrial Economics.
    4. Georgios Gerasimou, 2016. "Partially dominant choice," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 61(1), pages 127-145, January.
    5. Christopher Tyson, 2015. "Satisficing behavior with a secondary criterion," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(3), pages 639-661, March.
    6. Takashi Kunimoto & Roberto Serrano, 2020. "Rationalizable Incentives: Interim Implementation of Sets in Rationalizable Strategies," Working Papers 2020-15, Brown University, Department of Economics.
    7. Guy Barokas & Burak Ünveren, 2022. "Impressionable Rational Choice: Revealed-Preference Theory with Framing Effects," Mathematics, MDPI, vol. 10(23), pages 1-19, November.
    8. Yusufcan Masatlioglu & Daisuke Nakajima & Erkut Y. Ozbay, 2012. "Revealed Attention," American Economic Review, American Economic Association, vol. 102(5), pages 2183-2205, August.
    9. Bleile, Jörg, 2016. "Limited Attention in Case-Based Belief Formation," Center for Mathematical Economics Working Papers 518, Center for Mathematical Economics, Bielefeld University.
    10. Christopher Tyson, 2015. "Satisficing behavior with a secondary criterion," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(3), pages 639-661, March.
    11. Freeman, David J., 2017. "Preferred personal equilibrium and simple choices," Journal of Economic Behavior & Organization, Elsevier, vol. 143(C), pages 165-172.
    12. García-Sanz, María D. & Alcantud, José Carlos R., 2015. "Sequential rationalization of multivalued choice," Mathematical Social Sciences, Elsevier, vol. 74(C), pages 29-33.
    13. Özgür Kıbrıs & Yusufcan Masatlioglu & Elchin Suleymanov, 2023. "A theory of reference point formation," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 75(1), pages 137-166, January.
    14. T. Hayashi & R. Jain & V. Korpela & M. Lombardi, 2023. "Behavioral strong implementation," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 76(4), pages 1257-1287, November.
    15. Lleras, Juan Sebastián & Masatlioglu, Yusufcan & Nakajima, Daisuke & Ozbay, Erkut Y., 2017. "When more is less: Limited consideration," Journal of Economic Theory, Elsevier, vol. 170(C), pages 70-85.
    16. Yoram Halevy & Dotan Persitz & Lanny Zrill, 2018. "Parametric Recoverability of Preferences," Journal of Political Economy, University of Chicago Press, vol. 126(4), pages 1558-1593.
    17. Jose Apesteguia & Miguel A. Ballester, 2015. "A Measure of Rationality and Welfare," Journal of Political Economy, University of Chicago Press, vol. 123(6), pages 1278-1310.
    18. Boissonnet, Niels & Ghersengorin, Alexis & Gleyze, Simon, 2020. "Revealed Deliberate Preference Changes," MPRA Paper 101756, University Library of Munich, Germany.
    19. Manzini, Paola & Mariotti, Marco & Tyson, Christopher J., 2016. "Partial knowledge restrictions on the two-stage threshold model of choice," Journal of Mathematical Economics, Elsevier, vol. 64(C), pages 41-47.
    20. Domenico Cantone & Alfio Giarlotta & Stephen Watson, 2021. "Choice resolutions," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 56(4), pages 713-753, May.

    More about this item

    Keywords

    Revealed preferences; Law;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:theord:v:96:y:2024:i:1:d:10.1007_s11238-023-09943-x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.