Afriat's theorem for indivisible goods

Francoise Forges and Vincent Iehlé

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Abstract: We identify a natural counterpart of the standard GARP for demand data in which goods are all indivisible. We show that the new axiom (DARP, for "discrete axiom of revealed preference") is necessary and sufficient for the rationalization of the data by a well-behaved utility function. Our results complement the main finding of Polisson and Quah, Am. Econ. J.: Micro. 5(1) p.28-34 (2013), who rather minimally modify the original consumer problem with indivisible goods so that the standard GARP still applies.

Keywords: Afriat's theorem; GARP; indivisible goods; rationalization; revealed preference (search for similar items in EconPapers)
Date: 2014-10-01
New Economics Papers: this item is included in nep-mic and nep-upt
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00870052v2
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Citations: View citations in EconPapers (6)

Published in Journal of Mathematical Economics, 2014, 54, pp.1-6. ⟨10.1016/j.jmateco.2014.08.001⟩

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Journal Article: Afriat’s theorem for indivisible goods (2014)
Working Paper: Afriat's Theorem for Indivisible Goods (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00870052

DOI: 10.1016/j.jmateco.2014.08.001

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