Rationalizable choice functions

Yi-You Yang

Games and Economic Behavior, 2020, vol. 123, issue C, 120-126

Abstract: We study choice functions which arise in the context of matching with contracts. A choice function is rationalizable if it coincides with a choice function induced by a preference relation over sets of contracts. We show that a choice function is rationalizable if and only if it satisfies the Strong Axiom of Revealed Preference (SARP), and give an algorithm for verifying the rationalizability of a given choice function. Consequently, we prove that every path independent choice function is rationalizable. This implies that under the substitutability assumption, the rationalizability condition and the irrelevance of rejected contracts (IRC) condition are equivalent.

Keywords: Choice function; Rationalizability; Revealed preference; Path independence; Substitutability; Stable matching (search for similar items in EconPapers)
JEL-codes: C78 D11 D71 D86 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:123:y:2020:i:c:p:120-126

DOI: 10.1016/j.geb.2020.07.003

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