Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/320270 
Year of Publication: 
2024
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 19 [Issue:] 4 [Year:] 2024 [Pages:] 1415-1442
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
Evidence suggests that consumers do not perfectly optimize, contrary to a critical assumption of classical consumer theory. We propose a model in which consumer types can vary in both their preferences and their choice behavior. Given data on demand and the distribution of prices, we identify the set of possible values of the consumer surplus based on minimal rationality conditions: every type of consumer must be no worse off than if they either always bought the good or never did. We develop a procedure to narrow the set of surplus values using richer data sets and provide bounds on counterfactual demands.
Subjects: 
Behavioral welfare
bounded rationality
consumer theory
information design
revealed preference
JEL: 
D11
D6
D9
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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