Revealed (P)reference theory

Efe A. Ok; Pietro Ortoleva; Gil Riella

doi:10.1257/aer.20111046

Revealed (P)reference theory

Efe A. Ok, Pietro Ortoleva, Gil Riella

Research output: Contribution to journal › Article › peer-review

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Abstract

This paper develops axiomatically a revealed preference theory of reference-dependent choice behavior. Instead of taking the reference for an agent as exogenously given in the description of a choice problem, we suitably relax the Weak Axiom of Revealed Preference to obtain, endogenously, the existence of reference alternatives as well as the structure of choice behavior conditional on those alternatives. We show how this model captures some well-known choice patterns such as the attraction effect.

Original language	English (US)
Pages (from-to)	299-321
Number of pages	23
Journal	American Economic Review
Volume	105
Issue number	1
DOIs	https://doi.org/10.1257/aer.20111046
State	Published - Jan 1 2015
Externally published	Yes

All Science Journal Classification (ASJC) codes

Economics and Econometrics

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10.1257/aer.20111046

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Revealed (P)reference theory

Abstract

All Science Journal Classification (ASJC) codes

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