Revealed preference and indifferent selection

Eric Danan

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Abstract: It is shown that preferences can be constructed from observed choice behavior in a way that is robust to indifferent selection (i.e., the agent is indifferent between two alternatives but, nevertheless, is only observed selecting one of them). More precisely, a suggestion by Savage [Savage, L.J., 1954. The foundations of statistics. John Wiley and Sons] to reveal indifferent selection by considering small monetary perturbations of alternatives is formalized and generalized to a purely topological framework: preferences over an arbitrary topological space can be uniquely derived from observed behavior under the assumptions that they are continuous and nonsatiated and that a strictly preferred alternative is always chosen, and indifferent selection is then characterized by discontinuity in choice behavior. Two particular cases are then analyzed: monotonic preferences over a partially ordered set, and preferences representable by a continuous pseudo-utility function.

Keywords: Revealed preference; Indifference; Continuity; Nonsatiation; Monotonicity; Pseudo-utility (search for similar items in EconPapers)
Date: 2008
Note: View the original document on HAL open archive server: https://hal.science/hal-00872255
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Citations: View citations in EconPapers (11)

Published in Mathematical Social Sciences, 2008, 55, pp.24-37. ⟨10.1016/j.mathsocsci.2006.12.005⟩

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Journal Article: Revealed preference and indifferent selection (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00872255

DOI: 10.1016/j.mathsocsci.2006.12.005

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