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Aguiar, Victor H.
Hjertstrand, Per
Serrano, Roberto
Year of Publication: 
Series/Report no.: 
Research Report No. 2022-9
The University of Western Ontario, Department of Economics, London (Ontario)
Samuelson's (1938) weak (generalized) axiom of revealed preference- WGARP-is a minimal and appealing consistency condition of choice. We offer a rationalization of WGARP in general settings. Our main result is an exact analog of the celebrated Afriat's theorem, but for WGARP. Its ordinal rationalization is in terms of an asymmetric and locally nonsatiated preference function. Its cardinal rationalization uses a coalitional multi- utility (CMU) maxmin representation with a coherency restriction on the coalition structure. Effectively, the CMU representation aggregates piecemeal preferences within the decision maker (multiple rationales without preference reversals that allow for transitivity violations). Basic consumer theory and welfare analysis are also developed. Extensions to the weak axiom of revealed preference-WARP-and choices obeying the law of demand are included.
abstract consumer choice
weak axiom of revealed preference
Afriat's theorem
asymmetric preference function
coalitional multi-utility rationalization
welfare analysis
Document Type: 
Working Paper

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