Recently, Coarse Revealed Preference, a co-authored paper by Tenured Associate Professor Hu Gaoji from the Department of Microeconomics, School of Economics, Shanghai University of Finance and Economics, has been published online in Theoretical Economics, an international Tier‑1 economics journal.
Abstract
We propose a novel concept of rationalization, called coarse rationalization, tailored for the analysis of datasets where an agent’s choices are imperfectly observed. We characterize those datasets which are rationalizable in this sense and present an efficient algorithm to verify the characterizing condition. We then demonstrate how our results can be applied through a duality approach to test the rationalizability of datasets with perfectly observed choices but imprecisely observed linear budget sets. For datasets that consist of both perfectly observed feasible sets and choices but are inconsistent with perfect rationality, our results could be used to measure the extent to which choices or prices have to be perturbed to recover rationality.
Hu Gaoji is a Tenured Associate Professor at the School of Economics, Shanghai University of Finance and Economics. His research fields include matching theory, mechanism design, information design, and revealed preference theory. His research works have appeared in journals such as American Economic Journal: Microeconomics, Games and Economic Behavior, International Economic Review, and Theoretical Economics. He has undertaken research projects including the Youth Program, General Program and a participating role in the Major Program of the National Natural Science Foundation of China, as well as the Shanghai Dawn Program and Shanghai Pujiang Talent Program. He serves as Associate Editor of the Journal of Mathematical Economics.
