It is frequently assumed in several domains of economics that demand functions are invertible prices. At the primitive level preferences, however, corresponding characterization has remained elusive. We identify necessary and sufficient conditions on a utility-maximizing consumer’s preferences for her function to be continuous invertible: strict convexity, monotonicity, differentiability sense ...

We address the following question: When can one person properly be said to be more delay averse than another? In reply, several (nested) comparison methods are developed. These methods yield a theory of delay aversion which parallels that of risk aversion. The applied strength of this theory is demonstrated in a variety of dynamic economic settings, including the classical optimal growth and tr...

The logsum formula, which provides the expected maximum utility for the multinomial logit model, is often used as a measure of welfare. We provide here a closed form formula of the welfare measure of an individual who has not access to his first-best choice, but has access to his rth-best choice, r = 2, ...n, where n is the number of alternatives. The derivation is based on a standard identity ...

This paper estimates how overall consumer spending responds to changes in gasoline prices. It uses the differential impact across consumers of sharp drop prices 2014 for identification. estimation strategy is implemented using comprehensive, high-frequency, transaction-level data a large panel individuals. The average estimated marginal propensity consume (MPC) out unanticipated, permanent shoc...

We use detailed data from a large retail panel to study the effect of participation in Supplemental Nutrition Assistance Program (SNAP) on composition and nutrient content foods purchased for at-home consumption. find that SNAP is small relative cross-sectional variation most outcomes we consider. Estimates model relating household’s food purchases current level spending imply closing gap betwe...

Using a laboratory experiment, we identify whether decision-makers consider it mistake to violate canonical choice axioms. To do this, incentivize subjects report axioms they want their decisions satisfy. Then, make lottery choices which might conflict with axiom preferences. In instances of conflict, give the opportunity re-evaluate decisions. We find that many individuals follow and revise be...

We develop a version of Afriat’s Theorem that is applicable to a variety of choice environments, beyond the setting of classical consumer theory. This allows us to devise tests for rationalizability in the context of choice data on lotteries, contingent consumption, and intertemporal consumption. We also establish a version of Richter’s Theorem that characterizes the strict rationalizability of...

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 al...

When making choices, decision makers often either lack information about alternatives or lack the cognitive capacity to analyze every alternative. To capture these situations, we formulate a framework to study behavioral search by utilizing the idea of consideration sets. Consumers engage in a dynamic search process. At each stage, they consider only those options in the current consideration s...