Revealed Preference with Limited Consideration

Thomas Demuynck and Christian Seel

American Economic Journal: Microeconomics, 2018, vol. 10, issue 1, 102-31

Abstract: We derive revealed preference tests for models where individuals use consideration sets to simplify their consumption problem. Our basic test provides necessary and sufficient conditions for consistency of observed choices with the existence of consideration set restrictions. The same conditions can also be derived from a model in which the consideration set formation is endogenous and based on subjective prices. By imposing restrictions on these subjective prices, we obtain additional refined revealed preference tests. We illustrate and compare the performance of our tests by means of a dataset on household consumption choices.

JEL-codes: D11 D12 M31 (search for similar items in EconPapers)
Date: 2018
Note: DOI: 10.1257/mic.20150343
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Citations: View citations in EconPapers (9)

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Related works:
Working Paper: Revealed preference with limited consideration (2018)
Working Paper: Revealed preference with limited consideration (2014)
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