Afriat’s theorem for indivisible goods

Forges, Françoise; Iehlé, Vincent

doi:10.1016/j.jmateco.2014.08.001

Cited by 8 publications

(11 citation statements)

References 20 publications

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“…This assumption is not very restrictive in our setting, however, as the range of deductible options in each coverage is not very large and, therefore, assuming a differentiable Bernoulli utility function, local curvature is what matters. 14 A handful of papers study riskless choice with discrete choice sets (e.g., Polisson and Quah (2013), Forges and Iehlé (2014), Cosaert and Demuynck (2015)). …”

Section: Related Literaturementioning

confidence: 99%

Inference Under Stability of Risk Preferences

2014

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We leverage the assumption that preferences are stable across contexts to partially identify and conduct inference on the parameters of a structural model of risky choice. Working with data on households' deductible choices across three lines of insurance coverage and a model that nests expected utility theory plus a range of non-expected utility models, we perform a revealed preference analysis that yields household-specific bounds on the model parameters. We then impose stability and other structural assumptions to tighten the bounds, and we explore what we can learn about households' risk preferences from the intervals defined by the bounds. We further utilize the intervals to (i) classify households into preference types and (ii) recover the single parameterization of the model that best fits the data. Our approach does not entail making distributional assumptions about unobserved heterogeneity in preferences. Terms of use: Documents in EconStor may

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Section: Related Literaturementioning

confidence: 99%

Inference Under Stability of Risk Preferences

2014

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Section: Related Literaturementioning

confidence: 99%

Inference under stability of risk preferences

Barseghyan

Molinari

Teitelbaum

2016

Quantitative Economics

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We leverage the assumption that preferences are stable across contexts to partially identify and conduct inference on the parameters of a structural model of risky choice. Working with data on households' deductible choices across three lines of insurance coverage and a model that nests expected utility theory plus a range of non-expected utility models, we perform a revealed preference analysis that yields household-specific bounds on the model parameters. We then impose stability and other structural assumptions to tighten the bounds, and we explore what we can learn about households' risk preferences from the intervals defined by the bounds. We further utilize the intervals to (i) classify households into preference types and (ii) recover the single parameterization of the model that best fits the data. Our approach does not entail making distributional assumptions about unobserved heterogeneity in preferences.

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“…5 A utility function U : R ℓ + → R is homothetic if it is a positive monotonic transformation of a function that is homogeneous of degree 1; that is, if U (x) = f (g(x)) where g(x) : R ℓ + → R is homogeneous of degree 1 and f : R → R is positive monotonic. 6 Polisson and Quah (2013) and Forges and Iehlé (2014) also considered rationalizability problems in the indivisible goods settings. 7 A utility function U : Z ℓ + → Z is discrete concave if, for any x 1 , x 2 , .…”

Section: Definition 5 a Gb-data Set O Is General Budget Rationalizabmentioning

confidence: 99%

“…6 Polisson and Quah (2013) and Forges and Iehlé (2014) also considered rationalizability problems in the indivisible goods settings. 7 A utility function U : Z ℓ + → Z is discrete concave if, for any x 1 , x 2 , . .…”

Section: Definition 5 a Gb-data Set O Is General Budget Rationalizabmentioning

confidence: 99%

Revealed preference test and shortest path problem; graph theoretic structure of the rationalizability test

Shiozawa

2016

Journal of Mathematical Economics

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This paper presents some substantial relationships between the revealed preference test for a data set and the shortest path problem of a weighted graph. We give a unified perspective of several forms of rationalizability tests based on the shortest path problem and an additional graph theoretic structure, which we call the shortest path problem with weight adjustment. Furthermore, the proposed structure is used to extend the result of Quah (2014), which sharpened the classical Afriat's Theorem-type result.

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Afriat’s theorem for indivisible goods

Cited by 8 publications

References 20 publications

Inference Under Stability of Risk Preferences

Inference Under Stability of Risk Preferences

Inference under stability of risk preferences

Revealed preference test and shortest path problem; graph theoretic structure of the rationalizability test

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