Quasiconcave Preferences and Choices on a Probability Simplex – A Nonparametric Analysis

Arbeitspapier

A nonparametric approach is presented to test whether decisions on a probability simplex could be induced by quasiconcave preferences. Necessary and sufficient conditions are presented. If the answer is affirmative, the methods developed here allow to reconstruct bounds on indifference curves. Furthermore we can construct quasiconcave utility functions in analogy to the utility function constructed in the proof of Afriat's Theorem. The approach is of interest for decisions under risk, stochastic choice, and ex-ante fairness considerations. The method is particularly suitable for data collected in a laboratory experiment.

Object Details

• ISBN: 978-3-86788-200-2
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Ruhr Economic Papers ; No. 179

Classification and Topics

• Classification: Wirtschaft ; Semiparametric and Nonparametric Methods: General ; Design of Experiments: Laboratory, Individual ; Consumer Economics: Theory ; Consumer Economics: Empirical Analysis
• Subject: Afriat's theorem ; deterministic preferences ; decisions under risk ; experimental economcics ; nonparametric methods ; revealed preference ; stochastic choice ; Entscheidung bei Unsicherheit ; Offenbarte Präferenzen ; Test ; Nichtparametrisches Verfahren ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Heufer, Jan
• Event: Veröffentlichung
• (who): Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI)
• (where): Essen
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/36989
• Last update: 10.03.2025, 11:41 AM CET