Stochastic revealed preference and the theory of demand

This paper extends the deterministic revealed preference theory of consumer s' behavior to permit stochastic choices. In this extended framework, we in troduce a restriction on stochastic choices that constitutes a stochastic c ounterpart of the weak axiom of revealed preference. This restriction allow s us to derive stochastic versions of nonpositivity of the own substitution effect and the demand theorem. Journal of Economic Literature, Classificat ion Number Number: D11. (C) 1999 Academic Press.