Economic Theory

, Volume 54, Issue 3, pp 425–441 | Cite as

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

Research Article
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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.

Keywords

Revealed preferences Afriat’s theorem Optimal assignments Indivisible allocations 

JEL Classification

Primary D11 Secondary C60 C78 
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Copyright information

© Springer-Verlag 2012

Authors and Affiliations

  1. 1.Université Paris-DauphineParisFrance
  2. 2.Department of Economics Sciences Po, ParisParisFrance

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