Essays on revealed preference
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Date
2010-03-03T07:27:02Z
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Abstract
This thesis contributes to the theory of consumer’s behavior. It is devided
into three parts:The first part gives a brief history of the theoretical developments
relevant to the two consecutive parts and provides a detailed
outline.The second part contains theoretical contributions. Specifically,
(i) it provides a unifying proof technique to show that preference cycles
can be of arbitrary length formore than two but not for two commodities.
An immediate corollary is that the Weak Axiom of Revealed Preference
only implies the Strong Axiom for two commodities, (ii) it provides a
simple graphical way to construct preference cycles, (iii) it shows that
for two dimensional commodity spaces any homothetic utility function
that rationalizes each pair of observations in a set of consumption data
also rationalizes the entire set of observations, (iv) it explorers rationalizability
issues for finite sets of observations of stochastic choice and gives
two rationalizability theorems.The third part provides three practical
contributions. Specfically, (i) it explorers some possible applications of
a lemma used in the chapter on homothetic preferences in two dimensions,
(ii) it suggests a procedure to decide whether or not to treat a
consumer who violates the Generalized Axiom of Revealed Preference
as 'close enough' to utility maximization, (iii) it provides a new measure
for the severity of a violation of utility maximization based on the extent
to which the upper bound of the indifference map intersects the budget
set.
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Keywords
Revealed preference, Axiomatische Nachfragetheorie, Nichtparametrische Verfahren