Hicksian complementarity and perturbed utility models
Roy Allen () and
John Rehbeck ()
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Roy Allen: University of Western Ontario
John Rehbeck: The Ohio State University
Economic Theory Bulletin, 2020, vol. 8, issue 2, No 6, 245-261
Abstract This paper studies aggregate complementarity without price or income variation. We show that for a class of utility functions, variation in non-price observables allows one to recover a measure of complementarity similar to Hicksian complementarity. In addition, the entire Slutsky matrix can be recovered up to scale without price variation. We then examine aggregate complementarity in latent utility models used in discrete choice, bundles, and matching. We show that classical linear instrumental variables can recover Hicksian complementarity for the special case of quadratic utility.
Keywords: Hicksian complementarity; Demand; Instrumental variables (search for similar items in EconPapers)
JEL-codes: D01 D11 C10 (search for similar items in EconPapers)
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