Authors: Koji Yokote, Isa Hafalir, Fuhito Kojima, M. Bumin Yenmez
Date of publication: March 2023
Working paper number: 01
Abstract:
Path independence is arguably one of the most important choice rule properties in economic theory. We show that a choice rule is path independent if and only if it is rationalizable by a utility function satisfying ordinal concavity, a concept closely related to concavity notions in discrete mathematics. We also provide a representation result for choice rules that satisfy path independence and the law of aggregate demand.
Keywords: Rationality, representation theorems, ordinal concavity, path independence, law of aggregate demand, discrete convex analysis