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Disentangling Revealed Preference From Rationalization by a Preference

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  • Pablo Schenone

Abstract

The weak axiom of revealed preference (WARP) ensures that the revealed preference (i) is a preference relation (i.e., it is complete and transitive) and (ii) rationalizes the choices. However, when WARP fails, either one of these two properties is violated, but it is unclear which one it is. We provide an alternative characterization of WARP by showing that WARP is equivalent to the conjunction of two axioms each of which separately guarantees (i) and (ii).

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  • Pablo Schenone, 2023. "Disentangling Revealed Preference From Rationalization by a Preference," Papers 2306.11923, arXiv.org, revised Jan 2024.
    • Handle: RePEc:arx:papers:2306.11923
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    References listed on IDEAS

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    1. Paola Manzini & Marco Mariotti, 2012. "Categorize Then Choose: Boundedly Rational Choice And Welfare," Journal of the European Economic Association, European Economic Association, vol. 10(5), pages 1141-1165, October.
    2. Amartya K. Sen, 1971. "Choice Functions and Revealed Preference," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(3), pages 307-317.
    3. B. Douglas Bernheim & Antonio Rangel, 2007. "Toward Choice-Theoretic Foundations for Behavioral Welfare Economics," American Economic Review, American Economic Association, vol. 97(2), pages 464-470, May.
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