Testable Implications of Translation Invariance and Homotheticity: Variational, Maxmin, CARA and CRRA preferences
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 dataset is consistent from the corresponding utility representation. Our results complement traditional exercises in decision theory that take preferences as primitive.
Additional InformationJanuary 2015. We are very grateful to Simon Grant and Massimo Marinacci, who posed questions to us that led to some of the results in this paper.
Accepted Version - sswp1401.pdf