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Identification of preferences, demand and equilibrium with finite data

Author

Listed:
  • Kubler, Felix

    (University of Zurich)

  • Malhotra, Raghav

    (University of Warwick)

  • Polemarchakis, Herakles

    (University of Warwick)

Abstract

We give conditions under which an individual's preferences can be identified with finite data. First, we derive conditions that guarantee that a finite number of observations of an individual's binary choices identify preferences over an arbitrarily large subset of the choice space and allow one to predict how the individual shall decide when faced with choices not previously encountered. Second, we extend the argument to observations of individual demand. Finally, we show that nitely many observations of Walrasian equilibrium prices and pro les of individual endowments suffice to identify individual preferences and, as a consequence, equilibrium comparative statics.

Suggested Citation

  • Kubler, Felix & Malhotra, Raghav & Polemarchakis, Herakles, 2020. "Identification of preferences, demand and equilibrium with finite data," CRETA Online Discussion Paper Series 60, Centre for Research in Economic Theory and its Applications CRETA.
    • Handle: RePEc:wrk:wcreta:60
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    File URL: https://warwick.ac.uk/fac/soc/economics/research/centres/creta/papers/manage/creta60_-_herakles_polemarchakis.pdf
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    References listed on IDEAS

    as
    1. Christopher P. Chambers & Federico Echenique & Nicolas S. Lambert, 2021. "Recovering Preferences From Finite Data," Econometrica, Econometric Society, vol. 89(4), pages 1633-1664, July.
    2. 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.
    3. Debreu, Gerard, 1974. "Excess demand functions," Journal of Mathematical Economics, Elsevier, vol. 1(1), pages 15-21, March.
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    Cited by:

    1. Christopher P. Chambers & Federico Echenique & Nicolas S. Lambert, 2021. "Recovering Preferences From Finite Data," Econometrica, Econometric Society, vol. 89(4), pages 1633-1664, July.
    2. Raghav Malhotra, 2022. "(Functional)Characterizations vs (Finite)Tests: Partially Unifying Functional and Inequality-Based Approaches to Testing," Papers 2208.03737, arXiv.org, revised Dec 2023.

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    More about this item

    Keywords

    identification ; finite data ; preferences ; choices ; demand ; Walrasian equilibrium JEL codes: D80 ; G10;
    All these keywords.

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • G - Financial Economics

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