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Title: Revealed preference tests of collectively rational consumption behavior: formulations and algorithms*
Authors: Talla Nobibon, Fabrice
Cherchye, L.
Crama, Yves
Demuynck, T.
De Rock, B.
Spieksma, Frits
Issue Date: Sep-2013
Publisher: KU Leuven - Faculty of Economics and Business
Series Title: FEB Research Report KBI_1317
Abstract: 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 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 (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 ecient 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.
Publication status: published
KU Leuven publication type: IR
Appears in Collections:Research Center for Operations Research and Business Statistics (ORSTAT), Leuven
Department of Decision Sciences and Information Management, Leuven - miscellaneous

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