On Duality In Random Utility Models
We provide the discrete choice, random utility counterparts of some basic results of consumer theory. For the primal problem and related Marshallian probabilities, we provide a new, simpler proof of Roy's identity at aggregate level and investigate price and income effects. For the dual problem and related Hicksian probabilities, we extend Shepard's lemma at aggregate level to unbound expenditure and investigate compensated price effects. We establish a primal-dual equivalence result and provide the counterpart of the Slutsky equation.
|Date of creation:||2013|
|Date of revision:||2013|
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- Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
- Delle Site, Paolo, 2013. "Integration of choice probabilities in logit," Economics Letters, Elsevier, vol. 120(1), pages 57-60.
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- John K. Dagsvik & Anders Karlström, 2005. "Compensating Variation and Hicksian Choice Probabilities in Random Utility Models that are Nonlinear in Income," Review of Economic Studies, Oxford University Press, vol. 72(1), pages 57-76.
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