We develop a nonparametric and ordinal approach for testing pure strategy Nash equilibrium play in games with monotone best responses, such as those with strategic complements/substitutes. The approach makes minimal assumptions on unobserved heterogeneity, requires no parametric assumptions on...

This paper examines the amount of grandfathering needed for an emissionstrading scheme (ETS) to have a neutral impact on firm profits. Weprovide a simple formula to calculate profit-neutral grandfathering in aCournot model with firms of different sizes and a general demand function.Using this...

An observer makes a number of observations of an industry producing a homogeneous good. Each observation consists of the market price, the output of individual firms and perhaps information on each firm's production cost. We provide various tests (typically, linear programs) with which the...

We provide an example of a data set where all the revealed preference relations seem to be consistent with single crossing differences and yet the revealed preference relations cannot be extended to a complete preference obeying that property

With the aim of determining the welfare implications of price change in consumption data, we introduce a revealed preference relation over prices. We show that an absence of cycles in this preference relation characterizes a model of demand where consumers trade-off the utility of consumption...

This note explains the equivalence between approximate rationalizability and approximate cost-rationalizability within the context of consumer demand. In connection with these results, we interpret Afriat's (1973) critical cost efficiency index (CCEI) as a measure of cost (in)efficiency, in the...

To determine the welfare implications of price changes in demand data, we introduce a revealed preference relation over prices. We show that the absence of cycles in this relation characterizes a consumer who trades off the utility of consumption against the disutility of expenditure. Our model...

The Allais critique of expected utility theory (EUT) has led to the development of theories of choice under risk that relax the independence axiom, but which adhere to the conventional axioms of ordering and monotonicity. Unlike many existing labora-tory experiments designed to test...

Consider a finite data set where each observation consists of a bundle of contingent consumption chosen by an agent from a constraint set of such bundles. We develop a general procedure for testing the consistency of this data set with a broad class of models of choice under risk and under...