A simplified test for preference rationality of two-commodity choice |
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| Authors: | Samiran Banerjee James H Murphy |
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| Institution: | (1) Department of Economics, Emory University, Atlanta, GA, 30322-2240;(2) College of Business, Western Carolina University, Cullowhee, NC 28723, USA |
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| Abstract: | We provide a simplified test to determine if choice data from a two-commodity consumption set satisfies the Generalized Axiom
of Revealed Preference (GARP), and thus the preference or utility maximization hypothesis. We construct an algorithm for this
test and illustrate its application on experimental choice data.
JEL Classification C91, D11, D12
An erratum to this article is available at . |
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| Keywords: | Revealed preference GARP Laboratory experiments Rationality |
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