Classifying bounded rationality in limited data sets: a Slutsky matrix approach
Abstract Given any observed finite sequence of prices, wealth, and demand choices, we propose a way to measure and classify the departures from rationality in a systematic fashion, by connecting violations of the underlying Slutsky matrix properties to the length of revealed demand cycles. The appro...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
SpringerOpen
2018-07-01
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| Series: | SERIEs: Journal of the Spanish Economic Association |
| Subjects: | |
| Online Access: | http://link.springer.com/article/10.1007/s13209-018-0178-0 |
| Summary: | Abstract Given any observed finite sequence of prices, wealth, and demand choices, we propose a way to measure and classify the departures from rationality in a systematic fashion, by connecting violations of the underlying Slutsky matrix properties to the length of revealed demand cycles. The approach complements our previous study (Aguiar and Serrano in J Econ Theory 172:163–201, 2017), which is based on the entire demand function. The methodology can be easily applied in experimental demand data sets. |
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| ISSN: | 1869-4187 1869-4195 |