Computability of Preference, Utility, and Demand

Richter, Marcel K.
Wong, Kam-Chau
1996-12
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Computability of Preference, Utility, and Demand

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1996-12

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Center for Economic Research, Department of Economics, University of Minnesota

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Working Paper

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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)).

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Center for Economic Research Discussion Papers

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Discussion Paper
 298

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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.

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Richter, Marcel K.; Wong, Kam-Chau. (1996). Computability of Preference, Utility, and Demand. Retrieved from the University Digital Conservancy, https://hdl.handle.net/11299/55848.

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