Comparative Statics for a Consumer with Possibly Multiple Optimum Consumption Bundles

Non-positivity of the generalized substitution effect, non-positivity of the own-price substitution effect, homogeneity of degree zero in all prices and income, and the law of demand are some of the most primitive comparative static results in the standard revealed preference theory of consumers’ behaviour. These results are however derived for demand functions. The literature does not have corresponding comparative static results for the more plausible case of demand correspondences, where the consumer is permitted to have multiple chosen bundles in a given price-income situation. Using the revealed preference approach to the theory of consumers' behaviour, this note establishes such results for demand correspondences; the analysis can be readily adapted to prove corresponding results in the preference-based approach.demand correspondence, weak axiom of revealed preference, non-positivity of generalized substitution effect, non-positivity of own-price substitution effect, homogeneity of degree zero, law of demand

CO on Pt(111) puzzle; A possible solution

CO adsorption on the Pt(111) surface is studied using first-principles methods. As found in a recent study [Feibelman, et al., J. Phys. Chem. B 105, 4018 (2001)], we find the preferred adsorption site within density functional theory to be the hollow site, whereas experimentally it is found that the top site is preferred. The influence of pseudopotential and exchange-correlation functional error on the CO binding energy and site preference was carefully investigated. We also compare the site preference energy of CO on Pt(111) with the reaction energy of formaldehyde formation from H$_2$ and CO. We show that the discrepancies between the experimental and theoretical results are due to the generalized gradient approximation (GGA) treating different bond orders with varying accuracy. As a result, GGA results will contain significant error whenever bonds of different bond order are broken and formed

Revealed cardinal preference

I prove that as long as we allow the marginal utility for money (lambda) to vary between purchases (similarly to the budget) then the quasi-linear and the ordinal budget-constrained models rationalize the same data. However, we know that lambda is approximately constant. I provide a simple constructive proof for the necessary and sufficient condition for the constant lambda rationalization, which I argue should replace the Generalized Axiom of Revealed Preference in empirical studies of consumer behavior. 'Go Cardinals!' It is the minimal requirement of any scientifi c theory that it is consistent with the data it is trying to explain. In the case of (Hicksian) consumer theory it was revealed preference -introduced by Samuelson (1938,1948) - that provided an empirical test to satisfy this need. At that time most of economic reasoning was done in terms of a competitive general equilibrium, a concept abstract enough so that it can be built on the ordinal preferences over baskets of goods - even if the extremely specialized ones of Arrow and Debreu. However, starting in the sixties, economics has moved beyond the 'invisible hand' explanation of how -even competitive- markets operate. A seemingly unavoidable step of this 'revolution' was that ever since, most economic research has been carried out in a partial equilibrium context. Now, the partial equilibrium approach does not mean that the rest of the markets are ignored, rather that they are held constant. In other words, there is a special commodity -call it money - that reflects the trade-offs of moving purchasing power across markets. As a result, the basic building block of consumer behavior in partial equilibrium is no longer the consumer's preferences over goods, rather her valuation of them, in terms of money. This new paradigm necessitates a new theory of revealed preference

2022-9 A Rationalization of the Weak Axiom of Revealed Preference

Samuelson’s (1938) weak (generalized) axiom of revealed preference– WGARP–is a minimal and appealing consistency condition of choice. We offer a rationalization of WGARP in general settings. Our main result is an exact analog of the celebrated Afriat’s theorem, but for WGARP. Its ordinal rationalization is in terms of an asymmetric and locally nonsatiated preference function. Its cardinal rationalization uses a coalitional multi-utility (CMU) maxmin representation with a coherency restriction on the coalition structure. Effectively, the CMU representation aggregates piecemeal preferences within the decision maker (multiple rationales without preference reversals that allow for transitivity violations). Basic consumer theory and welfare analysis are also developed. Extensions to the weak axiom of revealed preference–WARP–and choices obeying the law of demand are included

Models of Equilibrium Economic Growth

We develop a turnpike theory for a class of dynamic general equilibrium models where total demand function satisfy monotonicity conditions. As special cases, we receive well known results about asymptotic behavior of optimal paths.equilibrium path; stationary(steady) state; turnpike theorem; monotonicity of demand function; generalized gross substitutability; revealed preference axiom; dynamic optimization model

CO adsorption on Cu(111) and Cu(001) surfaces: improving site preference in DFT calculations

CO adsorption on Cu(111) and Cu(001) surfaces has been studied within ab-initio density functional theory (DFT). The structural, vibrational and thermodynamic properties of the adsorbate-substrate complex have been calculated. Calculations within the generalized gradient approximation (GGA) predict adsorption in the threefold hollow on Cu(111) and in the bridge-site on Cu(001), instead of on-top as found experimentally. It is demonstrated that the correct site preference is achieved if the underestimation of the HOMO-LUMO gap of CO characteristic for DFT is correct by applying a molecular DFT+U approach. The DFT+U approach also produces good agreement with the experimentally measured adsorption energies, while introducing only small changes in the calculated geometrical and vibrational properties further improving agreement with experiment which is fair already at the GGA level.Comment: 15 pages, 3 figures, submitted to Surf. Sci., WWW: http://cms.mpi.univie.ac.at/mgajdos

Doing good vs. avoiding bad in prosocial choice: a refined test and extension of the morality preference hypothesis

Prosociality is fundamental to human social life, and, accordingly, much research has attempted to explain human prosocial behavior. Capraro and Rand (Judgment and Decision Making, 13, 99-111, 2018) recently provided experimental evidence that prosociality in anonymous, one-shot interactions (such as Prisoner’s Dilemma and Dictator Game experiments) is not driven by outcome-based social preferences – as classically assumed – but by a generalized morality preference for “doing the right thing”. Here we argue that the key experiments reported in Capraro and Rand (2018) comprise prominent methodological confounds and open questions that bear on influential psychological theory. Specifically, their design confounds: (i) preferences for efficiency with self-interest; and (ii) preferences for action with preferences for morality. Furthermore, their design fails to dissociate the preference to do “good” from the preference to avoid doing “bad”. We thus designed and conducted a preregistered, refined and extended test of the morality preference hypothesis (N=801). Consistent with this hypothesis, our findings indicate that prosociality in the anonymous, one-shot Dictator Game is driven by preferences for doing the morally right thing. Inconsistent with influential psychological theory, however, our results suggest the preference to do “good” was as potent as the preference to avoid doing “bad” in this case