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Hicksian complementarity and perturbed utility models

  • Roy Allen
  • John RehbeckEmail author
Research Article
  • 3 Downloads

Abstract

This paper studies aggregate complementarity without price or income variation. We show that for a class of utility functions, variation in non-price observables allows one to recover a measure of complementarity similar to Hicksian complementarity. In addition, the entire Slutsky matrix can be recovered up to scale without price variation. We then examine aggregate complementarity in latent utility models used in discrete choice, bundles, and matching. We show that classical linear instrumental variables can recover Hicksian complementarity for the special case of quadratic utility.

Keywords

Hicksian complementarity Demand Instrumental variables 

JEL Classification

D01 D11 C10 

Notes

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Copyright information

© Society for the Advancement of Economic Theory 2019

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of Western OntarioLondonCanada
  2. 2.Department of EconomicsThe Ohio State UniversityColumbusUSA

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