Center for Economic Research, Department of Economics, University of Minnesota
This paper studies consumer theory from the bounded rationality approach
proposed in Richter and Wong (1996a), with a "uniformity principle" constraining
the magnitudes (prices, quantities, etc.) and the operations (to perceive,
evaluate, choose, communicate, etc.) that agents can use. In particular, we operate
in a computability framework, where commodity quantities, prices, consumer preferences,
utility functions, and demand functions are computable by finite algorithms
(Richter and Wong (1996a)).
We obtain a computable utility representation theorem. We prove an existence
theorem for computable maximizers of quasiconcave computable utility functions
(preferences), and prove the computability of the demand functions generated by
such functions (preferences). We also provide a revealed preference characterization
of computable rationality for the finite case. Beyond consumer theory, the results
have applications in general equilibrium theory (Richter and Wong (1996a)).
Richter, M.K. and Wong, K., (1996), "Computability of Preference, Utility, and Demand", Discussion Paper No. 298, Center for Economic Research, Department of Economics, University of Minnesota.
Richter, Marcel K.; Wong, Kam-Chau.
Computability of Preference, Utility, and Demand.
Center for Economic Research, Department of Economics, University of Minnesota.
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