Contraction consistent stochastic choice correspondence
We model a general choice environment via probabilistic choice correspondences, with (possibly) incomplete domain and infinite universal set of alternatives. We offer a consistency restriction regarding choice when the feasible set contracts. This condition, ‘contraction consistency’, subsumes earlier notions such as Chernoff’s Condition, Sen’s a and ß, and regularity. We identify a restriction on the domain of the stochastic choice correspondence, under which contraction consistency is equivalent to the weak axiom of revealed preference in its most general form. When the universal set of alternatives is finite, this restriction is also necessary for such equivalence. Analogous domain restrictions are also identified for the special case where choice is deterministic but possibly multi-valued. Results due to Sen (Rev Econ Stud 38: 307-317, 1971) and Dasgupta and Pattanaik (Econ Theory 31: 35-50, 2007) fall out as corollaries. Thus, conditions are established, under which our notion of consistency, articulated only in reference to contractions of the feasible set, suffices as the axiomatic foundation for a general revealed preference theory of choice behaviour.
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Postal: School of Economics University of Nottingham University Park Nottingham NG7 2RD|
Phone: (44) 0115 951 5620
Fax: (0115) 951 4159
Web page: http://www.nottingham.ac.uk/economics/
More information through EDIRC
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.:
- Daniel McFadden, 2005. "Revealed stochastic preference: a synthesis," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 26(2), pages 245-264, 08.
- Indraneel Dasgupta, .
"Revealed Preference with Stochastic Demand Correspondence,"
07/06, University of Nottingham, School of Economics.
- Dasgupta Indraneel & Pattanaik P. K, 2010. "Revealed Preference with Stochastic Demand Correspondence," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-21, August.
- Varian, Hal R, 1982. "The Nonparametric Approach to Demand Analysis," Econometrica, Econometric Society, vol. 50(4), pages 945-73, July.
- Shasikanta Nandeibam, 2003. "Distribution of coalitional power in randomized multi-valued social choice," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 20(1), pages 3-25.
- Bandyopadhyay, Taradas & Dasgupta, Indraneel & Pattanaik, Prasanta K., 1999. "Stochastic Revealed Preference and the Theory of Demand," Journal of Economic Theory, Elsevier, vol. 84(1), pages 95-110, January.
- José Alcantud, 2006. "Notes and Comments: Stochastic demand correspondences and their aggregation properties," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 29(1), pages 55-69, 05.
- Indraneel Dasgupta & Prasanta Pattanaik, 2007. "‘Regular’ choice and the weak axiom of stochastic revealed preference," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 31(1), pages 35-50, April.
- Amartya K. Sen, 1971. "Choice Functions and Revealed Preference," Review of Economic Studies, Oxford University Press, vol. 38(3), pages 307-317.
- Dasgupta Indraneel, 2009.
"Supply Theory sans Profit Maximization,"
The B.E. Journal of Theoretical Economics,
De Gruyter, vol. 9(1), pages 1-16, July.
- Bandyopadhyay, Taradas & Bandyopadhyay, Bandyopadhyay & Pattanaik, Prasanta K., 2002. "Demand Aggregation and the Weak Axiom of Stochastic Revealed Preference," Journal of Economic Theory, Elsevier, vol. 107(2), pages 483-489, December.
- Taradas Bandyopadhyay & Indraneel Dasgupta & Prasanta Pattanaik, 2004. "A general revealed preference theorem for stochastic demand behavior," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 23(3), pages 589-599, March.
- Pattanaik, Prasanta K & Peleg, Bezalel, 1986. "Distribution of Power under Stochastic Social Choice Rules," Econometrica, Econometric Society, vol. 54(4), pages 909-21, July.
- Shasikanta Nandeibam, 2008. "A note on the structure of stochastic social choice functions," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 30(3), pages 447-455, April.
- Indraneel Dasgupta, 2005. "Consistent firm choice and the theory of supply," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 26(1), pages 167-175, 07.
- Nandeibam, Shasikanta, 1996. "Coalitional Power Structure in Stochastic Social Choice Functions with an Unrestricted Preference Domain," Journal of Economic Theory, Elsevier, vol. 68(1), pages 212-233, January.
- Barbera, Salvador & Pattanaik, Prasanta K, 1986. "Falmagne and the Rationalizability of Stochastic Choices in Terms of Random Orderings," Econometrica, Econometric Society, vol. 54(3), pages 707-15, May.
- WILLIAM J. McCAUSLAND, 2009. "Random Consumer Demand," Economica, London School of Economics and Political Science, vol. 76(301), pages 89-107, 02.
When requesting a correction, please mention this item's handle: RePEc:not:notecp:08/04. 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: ()
If references are entirely missing, you can add them using this form.