On behavioral complementarity and its implications

Christopher Chambers, Federico Echenique and Eran Shmaya

Journal of Economic Theory, 2010, vol. 145, issue 6, 2332-2355

Abstract: We study the behavioral definition of complementary goods: if the price of one good increases, demand for a complementary good must decrease. We obtain its full implications for observable demand behavior (its testable implications), and for the consumer's underlying preferences. We characterize those data sets which can be generated by rational preferences exhibiting complementarities. The class of preferences that generate demand complements has Leontief and Cobb-Douglas as its as extreme members.

Keywords: Revealed; preference; Gross; complements; Demand; theory (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (5)

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Related works:
Working Paper: On behavioral complementarity and its implications (2007)
Working Paper: On Behavioral Complementarity and its Implications (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:145:y:2010:i:6:p:2332-2355

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