Afriat's Theorem and Some Extensions to Choice under Uncertainty

Walter Diewert

Economics working papers from Vancouver School of Economics

Abstract: The first part of the paper reviews the methodology developed by Sydney Afriat for determining whether a finite set of price and quantity data are consistent with utility maximizing behavior by a consumer. Some extensions of his basic model to models of consumer behavior where the structure of preferences is restricted in some way are also explained. Examples of special structures are homotheticity, separability and quasilinearity of the utility function. The second half of the paper is devoted to developing Afriat type consistency tests for expected and nonexpected utility maximizing behavior.

Keywords: Revealed preference theory; Afriat inequalities; nonparametric approach to demand theory; homotheticity; separability; quasilinearity; testing for max (search for similar items in EconPapers)
Pages: 31 pages
Date: 2011-09-01, Revised 2011-09-01
New Economics Papers: this item is included in nep-mic and nep-upt
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Related works:
Journal Article: Afriat's Theorem and some Extensions to Choice under Uncertainty (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ubc:bricol:erwin_diewert-2011-22

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