Dziewulski_Afriat_JND_JET_R01.pdf (239.13 kB)
Just-noticeable difference as a behavioural foundation of the critical cost-efficiency index
Despite its ad hoc nature and lack of an appealing economic interpretation, the critical cost-efficiency index (or CCEI) proposed in Afriat (1973) is one of the most widespread measures of departures from rationality. In this paper, we provide a behavioural foundation for this index by showing that it is equivalent to a notion of the just-noticeable difference — a measure of dissimilarity between alternatives that is sufficient for the agent to tell them apart.
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- Published
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- Accepted version
Journal
Journal of Economic TheoryISSN
0022-0531Publisher
ElsevierExternal DOI
Volume
188Article number
a105071Department affiliated with
- Economics Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2020-05-18First Open Access (FOA) Date
2021-11-13First Compliant Deposit (FCD) Date
2020-05-15Usage metrics
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