Stochastic Complementarity

Paola Manzini, Marco Mariotti and Levent Ülkü ()
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Levent Ülkü: ITAM, Mexico

No 11296, IZA Discussion Papers from IZA Network @ LISER

Abstract: The Hicksian definition of complementarity and substitutability may not apply in contexts in which agents are not utility maximisers or where price or income variations, whether implicit or explicit, are not available. We look for tools to identify complementarity and substitutability satisfying the following criteria: they are behavioural (based only on observable choice data); model-free (valid whether the agent is rational or not); and they do not rely on price or income variation. We uncover a conflict between properties that it is arguably reasonable for a complementarity notion to possess. We discuss three different possible resolutions of the conflict.

Keywords: complements and substitutes; correlation; stochastic choice (search for similar items in EconPapers)
JEL-codes: D0 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2018-01
New Economics Papers: this item is included in nep-ore and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Stochastic Complementarity (2019)
Working Paper: Stochastic Complementarity (2015)
Working Paper: Stochastic Complementarity (2015)
Working Paper: Stochastic Complementarity (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp11296

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