Full-scale real tests of consumer behavior using experimental data

This paper reports on the results of three experiments based on the neoclas sical theory of consumer behavior. All these experiments were carried out w ith the aim of simulating real-world behavior. Nonparametric tests, applyin g the theory of revealed preference, show that a significant number of indi viduals exhibit inconsistent behavior. If nearly optimizing behavior is pos tulated, then most of these inconsistencies disappear, but random choices p roduce almost the same results. The hypothesis of a representative consumer (statistical average behavior) seems a more fruitful approach. (C) 2000 El sevier Science B.V. All rights reserved.