A General Revealed Preference Test for Quasilinear Preferences: Theory and Experiments

Mikhail Freer and Marco Castillo

Papers from arXiv.org

Abstract: We provide a generalized revealed preference test for quasilinear preferences. The test applies to nonlinear budget sets and non-convex preferences as those found in taxation and nonlinear pricing contexts. We study the prevalence of quasilinear preferences in a laboratory real-effort task experiment with nonlinear wages. The experiment demonstrates the empirical relevance of our test. We find support for either convex (non-separable) preferences or quasilinear preferences but weak support for the hypothesis of both quasilinear and convex preferences.

Date: 2021-11, Revised 2022-12
New Economics Papers: this item is included in nep-dcm, nep-exp and nep-upt
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Published in Exp. econ. 26 (2023) 673-696

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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2111.01248

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