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- Title
A general revealed preference theorem for stochastic demand behavior.
- Authors
Bandyopadhyay, Taradas; Dasgupta, Indraneel; Pattanaik, Prasanta K.
- Abstract
We present a general revealed preference theorem concerning stochastic choice behavior by consumers. We show that, when the consumer spends her entire wealth, the Weak Axiom of Stochastic Revealed Preference due to Bandyopadhyay, Dasgupta, and Pattanaik (1999) is equivalent to a restriction on stochastic demand behavior that we call stochastic substitutability. We also show that the relationship between the Weak Axiom of Revealed Preference and Samuelson's inequality in the deterministic theory, and the main result of Bandyopadhyay, Dasgupta, and Pattanaik (1999) are both special cases of our result.
- Subjects
STOCHASTIC processes; CONSUMPTION (Economics); CONSUMER behavior; STOCHASTIC analysis; ECONOMIC demand
- Publication
Economic Theory, 2004, Vol 23, Issue 3, p589
- ISSN
0938-2259
- Publication type
Article
- DOI
10.1007/s00199-003-0388-x