Published July 2009
| Submitted + Updated
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Implications of Pareto Efficiency for Two-Agent (Household) Choice
- Creators
-
Echenique, Federico
- Ivanov, Lozan
Abstract
We study when two-member household choice behavior is compatible with Pareto optimality. We ask when an external observer of household choices, who does not know the individuals' preferences, can rationalize the choices as being Pareto-optimal. Our main contribution is to reduce the problem of rationalization to a graph-coloring problem. As a result, we obtain simple tests for Pareto optimal choice behavior. In addition to the tests, and using our graph-theoretic representation, we show that Pareto rationalization is equivalent to a system of quadratic equations being solvable.
Additional Information
Author's copy: Date: September 10, 2010. We thank Leeat Yariv for comments on an earlier draft. We are also very grateful to an anonymous referee for his/her thoughtful comments. Our research was supported by the Lee Center at Caltech. We thank Leeat Yariv for comments on an earlier draft. Our research was supported by the Lee Center at Caltech.Attached Files
Submitted - sswp1308.pdf
Updated - pareto-rat.pdf
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Additional details
- Eprint ID
- 20353
- Resolver ID
- CaltechAUTHORS:20101008-103311343
- Lee Center at Caltech
- Created
-
2010-10-08Created from EPrint's datestamp field
- Updated
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2019-11-26Created from EPrint's last_modified field
- Caltech groups
- Social Science Working Papers
- Series Name
- Social Science Working Paper
- Series Volume or Issue Number
- 1308