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

Ekeland, Ivar; Galichon, Alfred

Ekeland, Ivar; Galichon, Alfred (2013), The housing problem and revealed preference theory: duality and an application, Economic theory, 54, 3, p. 425-441. http://dx.doi.org/10.1007/s00199-012-0719-x

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Type

Article accepté pour publication ou publié

Date

2013

Journal name

Economic theory

Volume

Number

Publisher

Springer

Pages

425-441

Abstract (EN)

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.

Subjects / Keywords

Revealed preferences; Afriat’s theorem; Optimal assignments; Indivisible allocations

JEL

D11 - Consumer Economics: Theory
C60 - General
C78 - Bargaining Theory; Matching Theory