The Housing Problem and Revealed Preference Theory: Duality and an application

Ivar Ekeland and Alfred Galichon ()
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Ivar Ekeland: CEREMADE - CEntre de REcherches en MAthématiques de la DEcision - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique
Alfred Galichon: ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique

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Abstract: This paper exhibits a duality between the theory of revealed preference of Afriat and the housing allocation problem of Shapley and Scarf. In particular, it is shown that Afriat's theorem can be interpreted as a second welfare theorem in the housing problem. Using this duality, the revealed preference problem is connected to an optimal assignment problem, and a geometrical characterization of the rationalizability of experiment data is given. This allows in turn to give new indices of rationalizability of the data and to define weaker notions of rationalizability, in the spirit of Afriat's efficiency index.

Keywords: Afriat's theorem; Indivisible allocations; Optimal assignment; Revealed preferences (search for similar items in EconPapers)
Date: 2013-11
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-01059558v1
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Published in Economic Theory, 2013, 54 (3), pp.425-441. ⟨10.1007/s00199-012-0719-x⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:spmain:hal-01059558

DOI: 10.1007/s00199-012-0719-x

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