CHANGING TASTES AND EFFECTIVE CONSISTENCY

• 成果类型: Article
• 署名作者: Selden, Larry; Wei, Xiao
• 署名单位: Columbia University; University of Pennsylvania
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/ecoj.12312
• 发表日期: 2016
• 页码: 1912-1946
• 关键词: inconsistent preferences; competitive equilibria; Utility maximization; time-inconsistent; aggregation; CHOICE; uncertainty; uniqueness; EXISTENCE; consumers

摘要

In a single commodity setting with changing tastes, an individual's consumption plan can be obtained using naive or sophisticated choice. We provide two sufficient conditions for when the solutions are unique and agree and the common plan is representable by a non-changing tastes utility. Because the solution is not revised over time, the plan and associated preferences are referred to as being effectively consistent. Afriat-style revealed preference tests are derived. The assumption of effective consistency can mitigate the problems of vulnerability to Dutch Books, non-existence of a competitive equilibrium and the aggregation of heterogeneous agents with changing tastes.