Charles Gauthier, Raghav Malhotra, Agustin Troccoli Moretti
arXiv 7 Aug 2022 · Theoretical Economics
arXiv:2208.03737 · PDF · Extracted main text
Classically, testing whether decision makers belong to specific preference classes involves two main approaches. The first, known as the functional approach, assumes access to an entire demand function. The second, the revealed preference approach, constructs inequalities to test finite demand data. This paper bridges these methods by using the functional approach to test finite data through preference learnability results. We develop a computationally efficient algorithm that generates tests for choice data based on functional characterizations of preference families. We provide these restrictions for various applications, including homothetic and weakly separable preferences, where the latter's revealed preference characterization is provably NP-Hard. We also address choice under uncertainty, offering tests for betweenness preferences. Lastly, we perform a simulation exercise demonstrating that our tests are effective in finite samples and accurately reject demands not belonging to a specified class.
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The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Kubler, Felix and Selden, Larry and Wei, Xiao (2014) Asset demand based tests of expected utility maximization | 0.811 | 4 | 2 | 100% |
| 2 | Cherchye, Laurens and Demuynck, Thomas and De Rock, Bram and Hjertst… Revealed preference tests for weak separability: An integer programming approach | 0.737 | 3 | 2 | 100% |
| 3 | Dekel, Eddie (1986) An axiomatic characterization of preferences under uncertainty: Weakening the independence axiom | 0.644 | 3 | 2 | 67% |
| 4 | Varian, Hal R (1983) Non-parametric tests of consumer behaviour | 0.644 | 2 | 2 | 100% |
| 5 | Afriat, Sydney N (1967) The construction of utility functions from expenditure data | 0.511 | 2 | 1 | 100% |
| 6 | Andreoni, James and Gillen, Benjamin J and Harbaugh, William T (2013) The power of revealed preference tests: Ex-post evaluation of experimental design | 0.511 | 2 | 1 | 100% |
| 7 | Bronars, Stephen G (1987) The power of nonparametric tests of preference maximization | 0.511 | 2 | 1 | 100% |
| 8 | Beigman, Eyal and Vohra, Rakesh (2006) Learning from revealed preference | 0.481 | 6 | 2 | 17% |
| 9 | Aguiar, Victor H and Kashaev, Nail (2021) Stochastic revealed preferences with measurement error | 0.405 | 1 | 1 | 100% |
| 10 | Ian Crawford and Bram De Rock Empirical Revealed Preference | 0.405 | 1 | 1 | 100% |
Showing the top 10 of 52 scored citations.