No. 571: Consumer Choice and Revealed Bounded Rationality
September 1, 2006
We study two boundedly rational procedures in consumer behavior. We show that these procedures can be detected by conditions on observable demand data of the same type as standard revealed preference axioms. This provides the basis for a non-parametric analysis of boundedly rational consumer behavior mirroring the classical one for utility maximization.
J.E.L classification codes: D1, D11
Keywords:Bounded rationality, Revealed preference, Consumer choice