Experimental Economics and Game Theory Seminar for March 8

Events, Seminars | February 27, 2019

Join us for the ICES Seminar in Experimental Economics and Game Theory of the Spring 2019 semester, featuring John K.H. Quah.

Prof. Quah, of Johns Hopkins University, will discuss his paper Revealed Price Preference: Theory and Empirical Analysis (Abstract). The talk will take place on Friday, March 8th, from 4:00 to 5:00pm in room 5183 of Vernon Smith Hall, Arlington campus.
Visit the Seminar schedule to access the paper and to learn more about upcoming speakers.

Abstract

With the aim of determining the welfare implications of price change in consumption data, we introduce a revealed preference relation over prices. We show that an absence of cycles in this preference relation characterizes a model of demand where consumers trade-off the utility of consumption against the disutility of expenditure. This model is appropriate whenever a consumer’s demand over a strict subset of all available goods is being analyzed. For the random utility extension of the model, we devise non-parametric statistical procedures for testing and welfare comparisons. The latter requires the development of novel tests of linear hypotheses for partially identified parameters. In doing so, we provide new algorithms for the calculation and statistical inference in non- parametric counterfactual analysis for a general partially identified model. Our applications on national household expenditure data provide support for the model and yield informative bounds concerning welfare rankings across different prices.

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