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

Quantum correlations from local amplitudes and the resolution of the Einstein-Podolsky-Rosen nonlocality puzzle

The Einstein-Podolsky-Rosen nonlocality puzzle has been recognized as one of the most important unresolved issues in the foundational aspects of quantum mechanics. We show that the problem is resolved if the quantum correlations are calculated directly from local quantities which preserve the phase information in the quantum system. We assume strict locality for the probability amplitudes instead of local realism for the outcomes, and calculate an amplitude correlation function.Then the experimentally observed correlation of outcomes is calculated from the square of the amplitude correlation function. Locality of amplitudes implies that the measurement on one particle does not collapse the companion particle to a definite state. Apart from resolving the EPR puzzle, this approach shows that the physical interpretation of apparently `nonlocal' effects like quantum teleportation and entanglement swapping are different from what is usually assumed. Bell type measurements do not change distant states. Yet the correlations are correctly reproduced, when measured, if complex probability amplitudes are treated as the basic local quantities. As examples we discuss the quantum correlations of two-particle maximally entangled states and the three-particle GHZ entangled state.Comment: Std. Latex, 11 pages, 1 table. Prepared for presentation at the International Conference on Quantum Optics, ICQO'2000, Minsk, Belaru

Constructive updating/downdating of oblique projectors: a generalization of the Gram-Schmidt process

A generalization of the Gram-Schmidt procedure is achieved by providing equations for updating and downdating oblique projectors. The work is motivated by the problem of adaptive signal representation outside the orthogonal basis setting. The proposed techniques are shown to be relevant to the problem of discriminating signals produced by different phenomena when the order of the signal model needs to be adjusted.Comment: As it will appear in Journal of Physics A: Mathematical and Theoretical (2007

Testing Consumer Rationality using Perfect Graphs and Oriented Discs

Given a consumer data-set, the axioms of revealed preference proffer a binary test for rational behaviour. A natural (non-binary) measure of the degree of rationality exhibited by the consumer is the minimum number of data points whose removal induces a rationalisable data-set.We study the computational complexity of the resultant consumer rationality problem in this paper. This problem is, in the worst case, equivalent (in terms of approximation) to the directed feedback vertex set problem. Our main result is to obtain an exact threshold on the number of commodities that separates easy cases and hard cases. Specifically, for two-commodity markets the consumer rationality problem is polynomial time solvable; we prove this via a reduction to the vertex cover problem on perfect graphs. For three-commodity markets, however, the problem is NP-complete; we prove thisusing a reduction from planar 3-SAT that is based upon oriented-disc drawings

The Combinatorial World (of Auctions) According to GARP

Revealed preference techniques are used to test whether a data set is compatible with rational behaviour. They are also incorporated as constraints in mechanism design to encourage truthful behaviour in applications such as combinatorial auctions. In the auction setting, we present an efficient combinatorial algorithm to find a virtual valuation function with the optimal (additive) rationality guarantee. Moreover, we show that there exists such a valuation function that both is individually rational and is minimum (that is, it is component-wise dominated by any other individually rational, virtual valuation function that approximately fits the data). Similarly, given upper bound constraints on the valuation function, we show how to fit the maximum virtual valuation function with the optimal additive rationality guarantee. In practice, revealed preference bidding constraints are very demanding. We explain how approximate rationality can be used to create relaxed revealed preference constraints in an auction. We then show how combinatorial methods can be used to implement these relaxed constraints. Worst/best-case welfare guarantees that result from the use of such mechanisms can be quantified via the minimum/maximum virtual valuation function

Spin-dependent Bohm trajectories associated with an electronic transition in hydrogen

The Bohm causal theory of quantum mechanics with spin-dependence is used to determine electron trajectories when a hydrogen atom is subjected to (semi-classical) radiation. The transition between the 1s ground state and the 2p0 state is examined. It is found that transitions can be identified along Bohm trajectories. The trajectories lie on invariant hyperboloid surfaces of revolution in R^3. The energy along the trajectories is also discussed in relation to the hydrogen energy eigenvalues.Comment: 18 pages, 8 figure

Weyl’s gauge argument

The standard U(1) “gauge principle” or “gauge argument” produces an exact potential A=dλ and a vanishing field F=ddλ=0. Weyl has his own gauge argument, which is sketchy, archaic and hard to follow; but at least it produces an inexact potential A and a nonvanishing field F=dA≠0. I attempt a reconstruction

Nonlocality, Bell's Ansatz and Probability

Quantum Mechanics lacks an intuitive interpretation, which is the cause of a generally formalistic approach to its use. This in turn has led to a certain insensitivity to the actual meaning of many words used in its description and interpretation. Herein, we analyze carefully the possible mathematical meanings of those terms used in analysis of EPR's contention, that Quantum Mechanics is incomplete, as well as Bell's work descendant therefrom. As a result, many inconsistencies and errors in contemporary discussions of nonlocality, as well as in Bell's Ansatz with respect to the laws of probability, are identified. Evading these errors precludes serious conflicts between Quantum Mechanics and both Special Relativity and Philosophy.Comment: 8&1/2 pages revtex; v2: many corrections, clairifications & extentions, all small; v3: editorial scru

A realist view of the canonical EPRB experiment based on quantum theory and its consequences

A realist view of the Einstein-Podolsky-Rosen-Bohm experiment with spins based on quantum theory is presented. This view implies that there is no action at a distance. It also implies that the measurement result A (B) for particle 1 (2) depends on both magnet angles, and hence the probability of obtaining the result A (B) also depends on both magnet angles. In light of these realist implications, it is clear that what is wrong at least with local realistic theory is not the locality or no action-at-a-distance assumption itself but rather the formal implementation of that assumption.Comment: To be published in the Journal of Optics B as part of the proceeedings of the Garda 2001 Workshop on Mysteries, Puzzles and Paradoxes in Quantum Mechanic