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Browsing by Subject "Revealed preference"

Now showing 1 - 2 of 2
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    A Revealed-Preference Implication of Weighted Utility Decisions Under Uncertainty
    (Center for Economic Research, Department of Economics, University of Minnesota, 1993-09) Park, In-Uck
    Revealed preference of the weighted utility theory of Chew (1983) is investigated in the same set-up as Green and Osband (1991) for expected utility theory; the structure of the partition of the state simplex according to the chosen act is examined. It is shown that the boundary between two partition elements generated by a weighted utility is the solution set to a quadratic equation. Moreover, except for special "symmetric" pairs of acts, weighted utilities in a generic set produce revealed preference partitions with non-affine boundaries, so that they are distinguishable from those of expected utilities which have affine boundaries according to Green and Osband.
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    Testing Strictly Concave Rationality
    (Center for Economic Research, Department of Economics, University of Minnesota, 1987-07) Matzkin, Rosa L.; Richter, Marcel K.
    We prove that the Strong Axiom of Revealed Preference tests the existence of a strictly quasiconcave (in fact, continuous, generically Coo, strictly concave, and strictly monotone) utility function generating finitely many demand observations. This sharpens earlier results of Afriat, Diewert, and Varian that tested ("nonparametrically") the existence of a piecewise linear utility function that could only weakly generate those demand observations. When observed demand is also invertible, we show that the rationalizing can be done in a Coo way, thus extending a result of Chiappori and Rochet from compact sets to all of Rn. For finite data sets, one implication of our result is that even some weak types of rational behavior - maximization of pseudotransitive or semitransitive preferences -- are observationally equivalent to maximization of continuous, strictly concave, and strictly monotone utility functions.