Afriat's theorem for indivisible goods

Iehlé, Vincent; Forges, Françoise

Iehlé, Vincent; Forges, Françoise (2014), Afriat's theorem for indivisible goods, Journal of Mathematical Economics, 54, p. 1-6. http://dx.doi.org/10.1016/j.jmateco.2014.08.001

Type

Article accepté pour publication ou publié

External document link

http://halshs.archives-ouvertes.fr/halshs-00870052

Date

2014

Journal name

Journal of Mathematical Economics

Volume

Publisher

Elsevier

Pages

1-6

Abstract (EN)

We identify a natural counterpart of the standard GARP for demand data in which goods are all indivisible. We show that the new axiom (DARP, for "discrete axiom of revealed preference") is necessary and sufficient for the rationalization of the data by a well-behaved utility function. Our results complement the main finding of Polisson and Quah, Am. Econ. J.: Micro. 5(1) p.28-34 (2013), who rather minimally modify the original consumer problem with indivisible goods so that the standard GARP still applies.

Subjects / Keywords

revealed preference; rationalization; indivisible goods; GARP; Afriat's theorem

JEL

C81 - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
D11 - Consumer Economics: Theory