Afriat’s Theorem for General Budget Sets

Francoise Forges and Enrico Minelli

No 1703, CESifo Working Paper Series from CESifo

Abstract: Afriat (1967) showed the equivalence of the strong axiom of revealed preference and the existence of a solution to a set of linear inequalities. From this solution he constructed a utility function rationalizing the choices of a competitive consumer. We extend Afriat’s theorem to a class of nonlinear budget sets. We thereby obtain testable implications of rational behavior for a wide class of economic environments, and a constructive method to derive individual preferences from observed choices. In an application to market games, we identify a set of observable restrictions characterizing Nash equilibrium outcomes.

Keywords: GARP; rational choice; revealed preferences; market games; SARP; WARP (search for similar items in EconPapers)
JEL-codes: C72 D11 D43 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-gth, nep-mic and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp1703.pdf (application/pdf)

Related works:
Journal Article: Afriat's theorem for general budget sets (2009)
Working Paper: Afriat's Theorem for General Budget Sets (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1703

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().