Abstract

https://ssrn.com/abstract=1719864
 
 

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The Housing Problem and Revealed Preference Theory: Duality and an Application


Ivar Ekeland


University of British Columbia (UBC) - Faculty of Education; Université Paris Dauphine - CEREMADE

Alfred Galichon


NYU, Department of Economics and Courant Institute

January 30, 2012


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.

Number of Pages in PDF File: 20

Keywords: Revealed Preferences, Afriat’s Theorem, Optimal Assignments, Indivisible Allocations

JEL Classification: D11, C60, C78


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Date posted: December 5, 2010 ; Last revised: January 30, 2012

Suggested Citation

Ekeland, Ivar and Galichon, Alfred, The Housing Problem and Revealed Preference Theory: Duality and an Application (January 30, 2012). Available at SSRN: https://ssrn.com/abstract=1719864 or http://dx.doi.org/10.2139/ssrn.1719864

Contact Information

Ivar Ekeland
University of British Columbia (UBC) - Faculty of Education ( email )
Université Paris Dauphine - CEREMADE ( email )
Place du Marechal de Lattre de Tassigny
Paris Cedex 16, 75775
France

Alfred Galichon (Contact Author)
NYU, Department of Economics and Courant Institute ( email )
269 Mercer Street, 7th Floor
New York, NY 10011
United States
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