Chapter Seven Revealed Preference 显示偏好
Chapter Seven Revealed Preference 显示偏好
Revealed Preference Analysis Suppose we observe the demands (consumption choices)that a consumer makes for different budgets.This reveals information about the consumer's preferences. We can use this information to
Revealed Preference Analysis Suppose we observe the demands (consumption choices) that a consumer makes for different budgets. This reveals information about the consumer’s preferences. We can use this information to
Revealed Preference Analysis -Test the behavioral hypothesis that a consumer chooses the most preferred bundle from those available. Discover the consumer's preference relation
Revealed Preference Analysis –Test the behavioral hypothesis that a consumer chooses the most preferred bundle from those available. –Discover the consumer’s preference relation
Assumptions on Preferences Preferences -do not change while the choice data are gathered. -are strictly convex. -are monotonic. Together,convexity and monotonicity imply that the most preferred affordable bundle is unique
Assumptions on Preferences Preferences –do not change while the choice data are gathered. – are strictly convex. – are monotonic. Together, convexity and monotonicity imply that the most preferred affordable bundle is unique
Assumptions on Preferences If preferences are convex and monotonic (i.e.well-behaved) then the most preferred 2 affordable bundle is unique. X1
Assumptions on Preferences x2 x1 x1 * x2 * If preferences are convex and monotonic (i.e. well-behaved) then the most preferred affordable bundle is unique
Direct Preference Revelation Suppose that the bundle x*is chosen when the bundle y is affordable. Then x*is directly revealed preferred to y (otherwise y would have been chosen). x*直接显示偏好于y
Direct Preference Revelation Suppose that the bundle x* is chosen when the bundle y is affordable. Then x* is directly revealed preferred to y (otherwise y would have been chosen). x*直接显示偏好于y
Direct Preference Revelation The chosen bundle x*is directly revealed preferred to the bundles y and z
Direct Preference Revelation x2 x1 x * y The chosen bundle x* is directly revealed preferred to the bundles y and z. z
Direct Preference Revelation That x is directly revealed preferred to y will be written as X
Direct Preference Revelation That x is directly revealed preferred to y will be written as x y. D p
Indirect Preference Revelation Suppose x is revealed directly preferred to y,and y is revealed directly preferred to z.Then,by transitivity,x is indirectly revealed preferred to z.Write this as x Z sox合y and y合z→ X Z
Indirect Preference Revelation Suppose x is revealed directly preferred to y, and y is revealed directly preferred to z. Then, by transitivity, x is indirectly revealed preferred to z. Write this as x z so x y and y z x z. D p D p I p I p
Indirect Preference Revelation X21 z is not affordable when x*is chosen
Indirect Preference Revelation x2 x1 x* z z is not affordable when x* is chosen