Neoclassical economic theory rules out systematic errors in consumptionchoice. According to the basic view, individuals know what they choose. They areable to predict how much utility an activity or a good produces for them now and inthe future and they can maximize their utility. This implies...

We provide a revealed preference analysis of the transferable utility hypothesis, which is widely used in economic models. First, we establish revealed preference conditions that must be satisfied for observed group behavior to be consistent with Pareto efficiency under transferable utility....

We solve Ireland's (1994) conspicuous consumption model (where social-status concerns are introduced into the utility function) for Cobb-Douglas (CD) utility. In the resulting generalized CD consumer model, Engel curves are no longer limited to linearity. In the homothetic CD case, total...

This note studies necessary and sufficient conditions for consumer demand data to be generated by a symmetric utility function. We find that a dataset of prices and consumption decisions can be rationalized by a symmetric utility function if and only if the symmetrized dataset satisfies the...

A novel relative utility function in cardinal form is put forward in analysing the problem of individual decision-making. Let relative utility denote the ratio of utility which derived from consuming a goods or service to the cost of it. An individual consumer will make her choice to maximize...

This paper presents a new model of time-additive consumption-wealth utility. Like recursive utility, this model separates the roles of risk aversion and the intertemporal elasticity of consumption allowing it to be calibrated to a wider variety of data. Indeed, the observed equity premium and...

The possibility that individuals may derive utility from the mere fact of holding wealth has long been recognized. A simple intertemporal model featuring utility from accumulation is used here to examine consumption and savings, the choice between inter vivos gifts and bequests (both to...

The paper investigates Dennis Robertson's effort to defend the Cambridge utilitarian tradition against the “new welfare economics”, developed in the 1930s and 1940s on the basis of Lionel Robbins's influential criticism of the scientific legitimacy of interpersonal comparisons of utility. It...

This paper presents a cardinal measure of choice consistency for perturbed utility models. The measure of choice consistency is built on additive errors to the model. The additive errors are meaningful since the perturbed utility model is cardinal and utility differences are meaningful. We...