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Testing consumer theory: Evidence from a natural field experiment

Author

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  • Adena, Maja
  • Huck, Steffen
  • Rasul, Imran

Abstract

We present evidence from a natural field experiment designed to shed light on whether individual behavior is consistent with a neoclassical model of utility maximization subject to budget constraints. We do this through the lens of a field experiment on charitable giving. We find that the behavior of at least 80% of individuals, on both the extensive and intensive margins, can be rationalized within a standard neoclassical choice model in which individuals have preferences, defined over own consumption and their contribution towards the charitable good, satisfying the axioms of revealed preference.

Suggested Citation

  • Adena, Maja & Huck, Steffen & Rasul, Imran, 2017. "Testing consumer theory: Evidence from a natural field experiment," Discussion Papers, Research Unit: Economics of Change SP II 2017-309, Social Science Research Center Berlin (WZB).
  • Handle: RePEc:zbw:wzbeoc:spii2017309
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    References listed on IDEAS

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    More about this item

    Keywords

    natural field experiment; revealed preference;

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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