Revealed Preference Test and Shortest Path Problem; Graph Theoretic Structure of the Rationalizability Test

Kohei Shiozawa ()
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Kohei Shiozawa: Graduate School of Economics, Osaka University

No 15-17, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: This paper provides substantial relations between revealed preference tests of a data set and shortest path problems of a network (a directed graph with weighted edges) by using a simple and straight- forward graph theoretic argument. It clari es the interpretation of the revealed preference tests, re nes the Afriat inequality, and give us an uni ed perspective of several forms of rationalizability tests and the classical utility representation problem of preferences. Furthermore, I provide several graph theoretic procedures to check rationalizability condition (GARP) which are more effcient than the most frequently used procedure of Varian (1982).

Keywords: Revealed Preference; Afriat Inequality; Cyclical Consistency; Generalized Axiom of Revealed Preference (GARP); Shortest Path Problem (search for similar items in EconPapers)
JEL-codes: C60 D11 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2015-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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