Revealed preference analysis for convex rationalizations on nonlinear budget sets

L. Cherchye; T. Demuynck; B. de Rock

doi:10.1016/j.jet.2014.05.002

Revealed preference analysis for convex rationalizations on nonlinear budget sets

L. Cherchye^*
, T. Demuynck
, B. de Rock

^*Corresponding author for this work

Microeconomics & Public Economics

Research output: Contribution to journal › Article › Academic › peer-review

Abstract

We present necessary and sufficient revealed preference conditions to verify whether a finite data set on nonlinear budget sets is consistent with the maximization of a quasi-concave utility function. When budget sets are finite unions of polyhedral convex sets, these conditions require feasibility of a set of linear inequalities, which makes them easy to use in practical applications.

Original language	English
Pages (from-to)	224-236
Number of pages	13
Journal	Journal of Economic Theory
Volume	152
Issue number	1
DOIs	https://doi.org/10.1016/j.jet.2014.05.002
Publication status	Published - Jul 2014

Keywords

Quasi-concavity
Convex preferences
Nonlinear budget sets
Revealed preference conditions
AFRIATS THEOREM

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10.1016/j.jet.2014.05.002

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title = "Revealed preference analysis for convex rationalizations on nonlinear budget sets",

abstract = "We present necessary and sufficient revealed preference conditions to verify whether a finite data set on nonlinear budget sets is consistent with the maximization of a quasi-concave utility function. When budget sets are finite unions of polyhedral convex sets, these conditions require feasibility of a set of linear inequalities, which makes them easy to use in practical applications.",

keywords = "Quasi-concavity, Convex preferences, Nonlinear budget sets, Revealed preference conditions, AFRIATS THEOREM",

author = "L. Cherchye and T. Demuynck and \{de Rock\}, B.",

year = "2014",

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AU - Cherchye, L.

AU - Demuynck, T.

AU - de Rock, B.

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AB - We present necessary and sufficient revealed preference conditions to verify whether a finite data set on nonlinear budget sets is consistent with the maximization of a quasi-concave utility function. When budget sets are finite unions of polyhedral convex sets, these conditions require feasibility of a set of linear inequalities, which makes them easy to use in practical applications.

KW - Quasi-concavity

KW - Convex preferences

KW - Nonlinear budget sets

KW - Revealed preference conditions

KW - AFRIATS THEOREM

U2 - 10.1016/j.jet.2014.05.002

DO - 10.1016/j.jet.2014.05.002

M3 - Article

SN - 0022-0531

VL - 152

SP - 224

EP - 236

JO - Journal of Economic Theory

JF - Journal of Economic Theory

IS - 1

ER -

Revealed preference analysis for convex rationalizations on nonlinear budget sets

Abstract

Keywords

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