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

Ivar Ekeland; Alfred Galichon

doi:10.1007/s00199-012-0719-x

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

Ivar Ekeland, Alfred Galichon

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

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 language	English (US)
Pages (from-to)	425-441
Number of pages	17
Journal	Economic Theory
Volume	54
Issue number	3
DOIs	https://doi.org/10.1007/s00199-012-0719-x
State	Published - Nov 2013

Keywords

Afriat's theorem
Indivisible allocations
Optimal assignments
Revealed preferences

ASJC Scopus subject areas

Economics and Econometrics

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10.1007/s00199-012-0719-x

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AB - 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.

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

Abstract

Keywords

ASJC Scopus subject areas

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