Non-rationalizable individuals and stochastic rationalizability

DOI10.1016/J.ECONLET.2022.110786MaRDI QIDQ2083558zbMATH OpenOpenAlexFDO

Authors Changkuk Im, John Rehbeck

Publication date 11 October 2022

Published in Economics Letters (Search for Journal in Brave)

Full work available at URL https://arxiv.org/abs/2102.03436

zbMATH Keywords

demand typesrevealed preferencestochastic rationalizability

Mathematics Subject Classification ID

Decision theory (91B06) Individual preferences (91B08)

Abstract: Experimental work regularly finds that individual choices are not deterministically rationalized by well-defined preferences. Nonetheless, recent work shows that data collected from many individuals can be stochastically rationalized by a distribution of well-defined preferences. We study the relationship between deterministic and stochastic rationalizability. We show that a population can be stochastically rationalized even when half of the individuals in the population cannot be deterministically rationalized. We also find the ability to detect individuals who are not deterministically rationalized from population level data can decrease as the number of observations increases.

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Cites work

• Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism
• Heterogeneous choice
• Nonparametric Analysis of Random Utility Models
• Revealed Preference Theory
• Revealed stochastic preference: a synthesis
• Stochastic revealed preferences with measurement error
• The Construction of Utility Functions from Expenditure Data
• The Nonparametric Approach to Demand Analysis

Cited in

(3)

• On the Origins of Imperfection and Apparent Non-rationality
• On randomized rationality
• A Revealed Preference Approach to Identification and Inference in Producer-Consumer Models

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