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New developments in revealed preference theory: decisions under risk, uncertainty, and intertemporal choice

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  • Federico Echenique

Abstract

This survey reviews recent developments in revealed preference theory. It discusses the testable implications of theories of choice that are germane to specific economic environments. The focus is on expected utility in risky environments; subjected expected utility and maxmin expected utility in the presence of uncertainty; and exponentially discounted utility for intertemporal choice. The testable implications of these theories for data on choice from classical linear budget sets are described, and shown to follow a common thread. The theories all imply an inverse relation between prices and quantities, with different qualifications depending on the functional forms in the theory under consideration.

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  • Federico Echenique, 2019. "New developments in revealed preference theory: decisions under risk, uncertainty, and intertemporal choice," Papers 1908.07561, arXiv.org, revised Dec 2019.
    • Handle: RePEc:arx:papers:1908.07561
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    3. Pierpaolo Angelini, 2024. "Invariance of the Mathematical Expectation of a Random Quantity and Its Consequences," Risks, MDPI, vol. 12(1), pages 1-17, January.
    4. Fabrizio Maturo & Pierpaolo Angelini, 2023. "Aggregate Bound Choices about Random and Nonrandom Goods Studied via a Nonlinear Analysis," Mathematics, MDPI, vol. 11(11), pages 1-30, May.
    5. Pierpaolo Angelini & Fabrizio Maturo, 2023. "Tensors Associated with Mean Quadratic Differences Explaining the Riskiness of Portfolios of Financial Assets," JRFM, MDPI, vol. 16(8), pages 1-25, August.
    6. Pierpaolo Angelini & Fabrizio Maturo, 2020. "Non-Parametric Probability Distributions Embedded Inside of a Linear Space Provided with a Quadratic Metric," Mathematics, MDPI, vol. 8(11), pages 1-17, October.
    7. Ashesh Rambachan, 2022. "Identifying Prediction Mistakes in Observational Data," NBER Chapters, in: Economics of Artificial Intelligence, National Bureau of Economic Research, Inc.
    8. Pierpaolo Angelini & Fabrizio Maturo, 2022. "The consumer’s demand functions defined to study contingent consumption plans," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(3), pages 1159-1175, June.

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