Subjective States and Revealed Preferences
All complete and transitive preferences over finite menus can be modeled via aggregation of subjective states. These states can be also interpreted in terms of revealed dominance relations derived from the primitive preferences. Any revealed dominance must have a Pareto representation with some subjective state space S. The primitive preference can be described in terms of a suitably defined aggregation of the space S. While S is not unique, its minimal size can be computed as the width of the endogenous family of focal menus. The case of singleton S corresponds to the Strotz-like model of changing tastes. Moreover, revealed dominance can be defined for choice functions. In this case, one can construct a collection of ex post revealed preferences and compare them with ex ante subjective states.
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