Gavin Kader
arXiv 14 Sep 2026 · Econometrics
arXiv:2609.16086 · PDF · Extracted main text
The Money Pump Index (MPI) of Echenique et al. (2011) measures the severity of consumer irrationality, but computing the exact mean and median MPI over all revealed preference cycles is NP-hard (Smeulders et al., 2013). Existing solutions rely on heuristic proxies, such as evaluating only shorter cycles or bounding the MPI. By framing revealed preferences as a directed graph, this paper projects choice violations onto fundamental cycle bases, which are minimal sets of linearly independent cycles that span the graph's entire cycle space. This yields computationally tractable estimators for the mean and median MPI that are asymptotically equivalent to the original MPI. Applying this methodology to the scanner dataset analyzed by Echenique et al. (2011) and Smeulders et al., (2013), the proposed estimators compute quickly and with negligible small-sample bias.
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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 | Echenique, F., Lee, S., and Shum, M (2011) The money pump as a measure of revealed preference violations | 1.000 | 15 | 6 | 100% |
| 2 | Smeulders, B., Cherchye, L., De Rock, B., and Spieksma, F. C (2013) The money pump as a measure of revealed preference violations: A comment | 1.000 | 15 | 5 | 100% |
| 3 | Afriat, S. N (1967) The construction of utility functions from expenditure data | 0.405 | 1 | 1 | 100% |
| 4 | Apesteguia, J. and Ballester, M. A (2015) A measure of rationality and welfare | 0.405 | 1 | 1 | 100% |
| 5 | Dean, M. and Martin, D (2016) Measuring rationality with the minimum cost of revealed preference violations | 0.405 | 1 | 1 | 100% |
| 6 | Demuynck, T. and Rehbeck, J (2023) Computing revealed preference goodness-of-fit measures with integer programming | 0.405 | 1 | 1 | 100% |
| 7 | Houtman, M. and Maks, J (1985) Determining all maximal data subsets consistent with revealed preference | 0.405 | 1 | 1 | 100% |
| 8 | Valiant, L. G (1979) The complexity of enumeration and reliability problems | 0.405 | 1 | 1 | 100% |
| 9 | Varian, H. R (1990) Goodness-of-fit in optimizing models | 0.405 | 1 | 1 | 100% |
Showing the top 9 of 9 scored citations.