SFB 303 Discussion Paper No. A - 258
Author: Kehoem, Timothy J.
Title: Gross Substitutability and the Weak Axiom of Revealed Preference
Abstract: This paper investigates the relationship between gross substitutability
and the weak axiom of revealed preference in excess demand functions. Gross
substitutability implies the weak axiom when the number of goods, n, is
less than four. There are robust counterexamples to this proposition when
n>or=4. Nonetheless, Monte Carlo experiments indicate that violations of the
weak axiom are extremely rare in functions that satisfy gross substitutability.
They also reveal, however, a new class of demand function that violates the
weak axiom. These results are of interest because of the close relationship
of the weak axiom to uniqueness of equilibrium in production economies.
Creation-Date: September 1989
Unfortunately this paper is not available online. Please contact us to order a hardcopy.
SFB 303 Homepage