The housing problem and revealed preference theory: Duality and an application

Ivar Ekeland, Alfred Galichon

    Research output: Contribution to journalArticle

    Abstract

    This paper exhibits a duality between the theory of revealed preference of Afriat and the housing allocation problem of Shapley and Scarf. In particular, it is shown that Afriat's theorem can be interpreted as a second welfare theorem in the housing problem. Using this duality, the revealed preference problem is connected to an optimal assignment problem, and a geometrical characterization of the rationalizability of experiment data is given. This allows in turn to give new indices of rationalizability of the data and to define weaker notions of rationalizability, in the spirit of Afriat's efficiency index.

    Original languageEnglish (US)
    Pages (from-to)425-441
    Number of pages17
    JournalEconomic Theory
    Volume54
    Issue number3
    DOIs
    StatePublished - Jan 1 2013

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    Keywords

    • Afriat's theorem
    • Indivisible allocations
    • Optimal assignments
    • Revealed preferences

    ASJC Scopus subject areas

    • Economics and Econometrics

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