Testable Implications of Translation Invariance and Homotheticity: Variational, Maxmin, Cara and CRRA Preferences

Paper Number: 
1401
Creation date: 
01/22/2015
Abstract: 

We provide revealed preference axioms that characterize models of translation invariant preferences. In particular, we characterize the models of variational, maxmin, CARA and CRRA utilities.  In each case, we present a revealed preference axiom that is satisfied by a dataset if and only if the data set is consistent from the corresponding utility representation.  Our results complement traditional exercies in decision theory that take preferences as primitive.

Paper Length: 
21
Keywords: 
variational preferences, maxmin utility, CARA, CRRA, revealed preference, testable implications