On behavioral complementarity and its implications

Christopher P. Chambers, Federico Echenique*, Eran Shmaya

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

4 Scopus citations

Abstract

We study the behavioral definition of complementary goods: if the price of one good increases, demand for a complementary good must decrease. We obtain its full implications for observable demand behavior (its testable implications), and for the consumer's underlying preferences. We characterize those data sets which can be generated by rational preferences exhibiting complementarities. The class of preferences that generate demand complements has Leontief and Cobb-Douglas as its as extreme members.

Original languageEnglish (US)
Pages (from-to)2332-2355
Number of pages24
JournalJournal of Economic Theory
Volume145
Issue number6
DOIs
StatePublished - Nov 2010

Keywords

  • Demand theory
  • Gross complements
  • Revealed preference

ASJC Scopus subject areas

  • Economics and Econometrics

Fingerprint Dive into the research topics of 'On behavioral complementarity and its implications'. Together they form a unique fingerprint.

Cite this