Revealed Preference with Limited Consideration

B-Tier
Journal: American Economic Journal: Microeconomics
Year: 2018
Volume: 10
Issue: 1
Pages: 102-31

Authors (2)

Thomas Demuynck (not in RePEc) Christian Seel (Maastricht University)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We derive revealed preference tests for models where individuals use consideration sets to simplify their consumption problem. Our basic test provides necessary and sufficient conditions for consistency of observed choices with the existence of consideration set restrictions. The same conditions can also be derived from a model in which the consideration set formation is endogenous and based on subjective prices. By imposing restrictions on these subjective prices, we obtain additional refined revealed preference tests. We illustrate and compare the performance of our tests by means of a dataset on household consumption choices.

Technical Details

RePEc Handle
repec:aea:aejmic:v:10:y:2018:i:1:p:102-31
Journal Field
General
Author Count
2
Added to Database
2026-01-25