revealed preference axioms; rationality; mixed-integer programming; global optimization; simulated annealing
Abstract :
[en] This paper focuses on revealed preference tests of the collective model of household consumption. We start by showing that the decision problems corresponding to testing collective rationality are {\sc np}-complete. This makes the application of these tests problematic for (increasingly available) large(r) scale data sets. We then present two approaches to overcome this negative result. First, we introduce exact algorithms based on mixed-integer programming ({\sc mip}) formulations of the collective rationality tests, which can be usefully applied to medium sized data sets. Next, we propose simulated annealing heuristics, which allow for efficient testing of the collective model in the case of large data sets. We illustrate our methods by a number of computational experiments based on Dutch labor supply data.
Research Center/Unit :
QuantOM HEC-ULiège
Disciplines :
Quantitative methods in economics & management
Author, co-author :
Talla Nobibon, Fabrice
Cherchye, Laurens
Crama, Yves ; Université de Liège - ULiège > HEC-Ecole de gestion : UER > Recherche opérationnelle et gestion de la production
Demuynck, Thomas
De Rock, Bram
Spieksma, Frits C.R.
Language :
English
Title :
Revealed preference tests of collectively rational consumption behavior: formulations and algorithms
Publication date :
November 2016
Journal title :
Operations Research
ISSN :
0030-364X
eISSN :
1526-5463
Publisher :
Operations Research Society of America, Baltimore, United States - Maryland
Volume :
64
Issue :
6
Pages :
1197–1216
Peer reviewed :
Peer Reviewed verified by ORBi
Name of the research project :
PAI COMEX
Funders :
BELSPO - Service Public Fédéral de Programmation Politique scientifique
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