The weak axiom of revealed preference and homogeneity of demand functions

In this paper we establish interrelations between fuzzy direct revelation axiom (FDRA), fuzzy transitive-closure coherence axiom (FTCCA), fuzzy consistent-closure coherence axiom (FCCCA) and fuzzy intermediate congruence axiom (FICA). We also establish their relationships with weak fuzzy congruence axiom (WFCA), strong fuzzy congruence axiom (SFCA) and weak axiom of fuzzy revealed preference (WAFRP). Condition for equivalence of fuzzy Arrow axiom (FAA) and weak fuzzy congruence axiom (WFCA) on arbitrary domain is also given.

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The Weak Axiom of Revealed Preference in a Productive Economy

The Review of Economic Studies ◽

10.2307/2297506 ◽

1989 ◽

Vol 56 (4) ◽

pp. 635 ◽

Cited By ~ 6

Author(s):

B. Grodal ◽

W. Hildenbrand

Keyword(s):

Revealed Preference ◽

Weak Axiom

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Bounding quantile demand functions using revealed preference inequalities

Journal of Econometrics ◽

10.1016/j.jeconom.2014.01.005 ◽

2014 ◽

Vol 179 (2) ◽

pp. 112-127 ◽

Cited By ~ 32

Author(s):

Richard Blundell ◽

Dennis Kristensen ◽

Rosa Matzkin

Keyword(s):

Revealed Preference ◽

Demand Functions

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Inverse problems of demand analysis and their applications to computation of positively-homogeneous Konüs–Divisia indices and forecasting

Journal of Inverse and Ill-Posed Problems ◽

10.1515/jiip-2015-0015 ◽

2016 ◽

Vol 24 (4) ◽

Cited By ~ 3

Author(s):

Nikolay I. Klemashev ◽

Alexander A. Shananin

Keyword(s):

Utility Function ◽

A Priori ◽

Revealed Preference ◽

Demand Analysis ◽

Mathematical Programming Problem ◽

Demand Functions ◽

Preference Theory ◽

Homogeneity Property ◽

Economic Indices ◽

Revealed Preference Theory

AbstractAccording to Pareto’s theory of consumer demand a rational representative consumer should choose their consumption bundle as the solution of a mathematical programming problem of maximization of the utility function under their budget constraint. The inverse problem of demand analysis is to recover the utility function from the demand functions. The answer to the question of solvability of this problem is based on the revealed preference theory. If the problem is unsolvable, one should apply regularization procedure by introducing irrationality indices. When recovering the utility function one puts a priori requirements on it. In this paper, we suggest including positively-homogeneity property into these requirements. We compare the setups with and without this requirement both theoretically and empirically and provide evidence in favor of requiring this property when computing economic indices for consumer representing consumption behavior of large number of various households for large time intervals.

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