A revealed preference test for weakly separable preferences
Consider a finite data set of price vectors and consumption bundles; under what conditions will there be a weakly separable utlity function that rationalizes the data? This paper shows that rationalization in this sense is possible if and only if there exists a preference order on some finite set of consumption bundles that is consistent with the observations and that is weakly separable. Since there can only be a finite number of preference orders on this set, the problem of rationalization with a weakly separable utility function is solvable.
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- A. Fostel & H. Scarf & M. Todd, 2004.
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- Herbert E. Scarf & Ana Fostel & Michael J. Todd, 2004. "Two New Proofs of Afriat's Theorem," Yale School of Management Working Papers ysm377, Yale School of Management.
- Anna Fostel & Herbert E. Scarf & Michael J. Todd, 2003. "Two New Proofs of Afriat's Theorem," Cowles Foundation Discussion Papers 1415, Cowles Foundation for Research in Economics, Yale University.
- Francoise Forges & Enrico Minelli, 2006.
"Afriat's Theorem for General Budget Sets,"
ubs0609, University of Brescia, Department of Economics.
- Laurens CHERCHYE & Thomas DEMUYNCK & Bram DE ROCK, 2011.
"Revealed preference tests for weak separability: an integer programming approach,"
Working Papers Department of Economics
ces11.25, KU Leuven, Faculty of Economics and Business, Department of Economics.
- Cherchye, Laurens & Demuynck, Thomas & De Rock, Bram & Hjertstrand, Per, 2015. "Revealed preference tests for weak separability: An integer programming approach," Journal of Econometrics, Elsevier, vol. 186(1), pages 129-141.
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