Afriat's theorem for indivisible goods

Francoise Forges (1, 2) , Vincent Iehlé (1, 2)

1 LEDa - Laboratoire d'Economie de Dauphine
2 CEREMADE - CEntre de REcherches en MAthématiques de la DEcision

We identify a natural counterpart of the standard GARP for demand data in which goods are all indivisible. We show that the new axiom (DARP, for "discrete axiom of revealed preference") is necessary and sufficient for the rationalization of the data by a well-behaved utility function. Our results complement the main finding of Polisson and Quah, Am. Econ. J.: Micro. 5(1) p.28-34 (2013), who rather minimally modify the original consumer problem with indivisible goods so that the standard GARP still applies.

Mots clés: Afriat's theorem; GARP; indivisible goods; rationalization; revealed preference

Domaines: Economies et finances

Francoise Forges, Vincent Iehlé. Afriat's theorem for indivisible goods. Journal of Mathematical Economics, 2014, 54, pp.1-6. ⟨10.1016/j.jmateco.2014.08.001⟩. ⟨halshs-00870052v2⟩