The Identification of Preferences from Equilibrium Prices

Pierre-André Chiappori (), Ivar Ekeland, Felix Kubler and Heracles M. Polemarchakis
Additional contact information
Pierre-André Chiappori: Department of Economics - University of Chicago
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, Institut de Finance - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres
Heracles M. Polemarchakis: CORE - Center of Operation Research and Econometrics [Louvain] - UCL - Université Catholique de Louvain = Catholic University of Louvain, Department of Economics - Brown University

Working Papers from HAL

Abstract: The fundamentals of an exchange economy, the preferences of individuals, can be identified from the competitive equilibrium correspondence, which associates equilibrium prices of commodities to allocations of endowments; the argument extends to production economies. The essential step is the identification of fundamentals from aggregate demand as a function of the prices of commodities and the distribution of income. The graph of the equilibrium correspondence or of the aggregate demand function satisfy non - trivial restrictions. The identification of fundamentals allows for the prediction of the response of individuals and the economy to changes in the organization of production and exchange, while restrictions on the equilibrium correspondence or the aggregate demand function imply that general equilibrium theory has testable implications.

Keywords: aggregation; equilibrium; identification; testability.; testability (search for similar items in EconPapers)
Date: 1999
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Published in 1999

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Related works:
Working Paper: The identification of preferences from equilibrium prices (2000)
Working Paper: The Identification of Preferences from Equilibrium Prices (2000)
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