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Revealed smooth nontransitive preferences

Author

Listed:
  • Hans Keiding
  • Mich Tvede
Abstract
In the present paper, we are concerned with the behavioural consequences of consumers having nontransitive preference relations. Data sets consist of finitely many observations of price vectors and consumption bundles. A preference relation rationalizes a data set provided that for every observed consumption bundle, all strictly preferred bundles are more expensive than the observed bundle. Our main result is that data sets can be rationalized by a smooth nontransitive preference relation if and only if prices can normalized such that the law of demand is satisfied. Market data sets consist of finitely many observations of price vectors, lists of individual incomes and aggregate demands. We apply our main result to characterize market data sets consistent with equilibrium behaviour of pure-exchange economies with smooth nontransitive consumers. Copyright Springer-Verlag Berlin Heidelberg 2013

Suggested Citation

  • Hans Keiding & Mich Tvede, 2013. "Revealed smooth nontransitive preferences," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 54(3), pages 463-484, November.
  • Handle: RePEc:spr:joecth:v:54:y:2013:i:3:p:463-484
    DOI: 10.1007/s00199-013-0765-z
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    References listed on IDEAS

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    Cited by:

    1. Alfred Galichon & John Quah, 2013. "Symposium on revealed preference analysis," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 54(3), pages 419-423, November.
    2. Takashi Kunimoto & Roberto Serrano, 2020. "Rationalizable Incentives: Interim Implementation of Sets in Rationalizable Strategies," Working Papers 2020-15, Brown University, Department of Economics.
    3. Victor H. Aguiar & Roberto Serrano, 2018. "Cardinal Revealed Preference, Price-Dependent Utility, and Consistent Binary Choice," Working Papers 2018-3, Brown University, Department of Economics.
    4. Aguiar, Victor H. & Hjertstrand, Per & Serrano, Roberto, 2020. "A Rationalization of the Weak Axiom of Revealed Preference," Working Paper Series 1321, Research Institute of Industrial Economics.
    5. Mogens Fosgerau & John Rehbeck, 2023. "Nontransitive Preferences and Stochastic Rationalizability: A Behavioral Equivalence," Papers 2304.14631, arXiv.org.

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    More about this item

    Keywords

    Law of demand; Revealed preferences; GARP; SARP; SSARP; WARP; D1; D5;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium

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