Testable Restrictions On The Equilibrium Manifold Under Random Preferences
General equilibrium theory was criticized for its apparent irrefutability, as seemingly implied by the Sonnenschein-Mantel-Debreu theorem. This view was challenged by Brown and Matzkin (1996), who showed the existence of testable restrictions on the equilibrium manifold. Brown and Matzkin, however, maintain the assumption that individual preferences are invariant (against psychological evidence). I consider the Brown- Matzkin problem under random preferences: for each profile of endowments one observes a distribution of prices; does there exist a probability distribution of preferences that explains the observed distributions of prices via Walrasian equilibria? I argue that even under random utilities general equilibrium theory is falsifiable.
|Date of creation:||31 Jan 2003|
|Date of revision:|
|Contact details of provider:|| |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- P. A. Chiappori & I. Ekeland, 1999.
"Aggregation and Market Demand: An Exterior Differential Calculus Viewpoint,"
Econometric Society, vol. 67(6), pages 1435-1458, November.
- Chiappori, Pierre-André & Ekeland, Ivar, 1999. "Aggregation and Market Demand: An Exterior Differential Calculus Viewpoint," Economics Papers from University Paris Dauphine 123456789/6427, Paris Dauphine University.
- Chiappori, P. -A. & Ekeland, I. & Kubler, F. & Polemarchakis, H. M., 2004.
"Testable implications of general equilibrium theory: a differentiable approach,"
Journal of Mathematical Economics,
Elsevier, vol. 40(1-2), pages 105-119, February.
- P.A. Chiappori & I. Ekeland & F. Kubler & H.M. Polemarchakis, 2002. "Testable Implications of General Equilibrium Theory: a differentiable approach," Working Papers 2002-10, Brown University, Department of Economics.
- DEBREU, GÃ©rard, .
"Economies with a finite set of equilibria,"
CORE Discussion Papers RP
67, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Brown, Donald J & Matzkin, Rosa L, 1996.
"Testable Restrictions on the Equilibrium Manifold,"
Econometric Society, vol. 64(6), pages 1249-62, November.
- Debreu, Gerard, 1972.
Econometric Society, vol. 40(4), pages 603-15, July.
- Rosa L. Matzkin & Marcel K. Richter, 1987.
"Testing Strictly Concave Rationality,"
Cowles Foundation Discussion Papers
844, Cowles Foundation for Research in Economics, Yale University.
- Andrés Carvajal, .
"Testable Restrictions of General Equilibrium Theory in Exchange Economies with Externalities,"
Borradores de Economia
231, Banco de la Republica de Colombia.
- Andrés Carvajal, 2004. "Testable Restrictions of General Equilibrium Theory in Exchange Economies with Externalities," Royal Holloway, University of London: Discussion Papers in Economics 04/28, Department of Economics, Royal Holloway University of London, revised Nov 2004.
- Andrés Carvajal, 2003. "Testable Restrictions og General Equilibrium Theory in Exchange Economies with Externalities," BORRADORES DE ECONOMIA 003556, BANCO DE LA REPÚBLICA.
- Mantel, Rolf R., 1974. "On the characterization of aggregate excess demand," Journal of Economic Theory, Elsevier, vol. 7(3), pages 348-353, March.
- Geanakoplos, J D & Polemarchakis, H M, 1980. "On the Disaggregation of Excess Demand Functions," Econometrica, Econometric Society, vol. 48(2), pages 315-31, March.
- Hausman, Daniel M., 2000. "Revealed preference, belief, and game theory," Economics and Philosophy, Cambridge University Press, vol. 16(01), pages 99-115, April.
- Shafer, Wayne & Sonnenschein, Hugo, 1993. "Market demand and excess demand functions," Handbook of Mathematical Economics, in: K. J. Arrow & M.D. Intriligator (ed.), Handbook of Mathematical Economics, edition 4, volume 2, chapter 14, pages 671-693 Elsevier.
- Diewert, W. E., 1977. "Generalized slutsky conditions for aggregate consumer demand functions," Journal of Economic Theory, Elsevier, vol. 15(2), pages 353-362, August.
- Debreu, Gerard, 1974. "Excess demand functions," Journal of Mathematical Economics, Elsevier, vol. 1(1), pages 15-21, March.
- Kubler, Félix & Ekeland, Ivar & Chiappori, Pierre-André & Polemarchakis, Heracles, 1999.
"The identification of preferences from equilibrium prices,"
Economics Papers from University Paris Dauphine
123456789/6360, Paris Dauphine University.
- CHIAPPORI, Pierre-AndrÃ© & EKELAND, Ivar & KUBLER, FÃ©lix & POLEMARCHAKIS, Heracles, 2000. "The identification of preferences from equilibrium prices," CORE Discussion Papers 2000024, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Constantinides,George & Duffie,Darrel, 1992.
"Asset pricing with heterogeneous consumers,"
Discussion Paper Serie A
381, University of Bonn, Germany.
- Allen, B., 1985. "Continuous random selections from the equilibrium correspondence," CORE Discussion Papers 1985020, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Chiappori, Pierre-Andre & Rochet, Jean-Charles, 1987. "Revealed Preferences and Differentiable Demand: Notes and Comments," Econometrica, Econometric Society, vol. 55(3), pages 687-91, May.
- Krebs, Tom, 2004. "Testable implications of consumption-based asset pricing models with incomplete markets," Journal of Mathematical Economics, Elsevier, vol. 40(1-2), pages 191-206, February.
- Kubler, Felix, 2003. "Observable restrictions of general equilibrium models with financial markets," Journal of Economic Theory, Elsevier, vol. 110(1), pages 137-153, May.
- Sonnenschein, Hugo, 1973. "Do Walras' identity and continuity characterize the class of community excess demand functions?," Journal of Economic Theory, Elsevier, vol. 6(4), pages 345-354, August.
When requesting a correction, please mention this item's handle: RePEc:col:000094:001899. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Clorith Angélica Bahos Olivera)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.