Direct Preference Revelation That x is revealed directly as preferred to y will be written as y D 北京大学经济学院 Slidell
北京大学经济学院 Slide11 Direct Preference Revelation • That x is revealed directly as preferred to y will be written as x y Dp
Indirect Preference Revelation (间接显示性偏好) Suppose x is revealed directly preferred to y, and y is revealed directly preferred to z. Then, by transitivity, x is revealed indirectly as preferred to z. Write this as XZ so×x y and yZ x> Z 北京大学经济学院 Slide12
北京大学经济学院 Slide12 Indirect Preference Revelation （间接显示性偏好） • Suppose x is revealed directly preferred to y, and y is revealed directly preferred to z. Then, by transitivity, x is revealed indirectly as preferred to z. Write this as • so x y and y z x z. D p D p I p X Z I f
Indirect Preference Revelation z is not affordable when x* is chosen z is not affordable when y* is chosen. So x*and z cannot be compared directly. 十 大 But x* y 大 and y*>z SO X>Z X 北京大学经济学院 Slide13
北京大学经济学院 Slide13 Indirect Preference Revelation x2 z is not affordable when x* is chosen, z* is not affordable when y* is chosen. So x* and z cannot be compared directly. x* y* z But x* y* and y* z so x* z. D p D p I p x1
Two Axioms of revealed Preference (显示性偏好的两个公理) To apply revealed preference analysis, choices must satisfy two criteria the Weak and the Strong Axioms of Revealed Preference.(显示性偏好弱 和强公理) 北京大学经济学院 Slide14
北京大学经济学院 Slide14 Two Axioms of Revealed Preference (显示性偏好的两个公理) • To apply revealed preference analysis, choices must satisfy two criteria -- the Weak and the Strong Axioms of Revealed Preference.（显示性偏好弱 和强公理）
The Weak Axiom of revealed Preference(WaRp) If the bundle x is revealed directly as preferred to the bundle y then it is never the case that y is revealed directly as preferred to x; i.. not(y×) 北京大学经济学院 Slide15
北京大学经济学院 Slide15 The Weak Axiom of Revealed Preference (WARP) • If the bundle x is revealed directly as preferred to the bundle y then it is never the case that y is revealed directly as preferred to x; i.e. x y not (y x). Dp Dp