Econometrica: May 1983, Volume 51, Issue 3

Expectations, Demand, and Observability

https://doi.org/0012-9682(198305)51:3<565:EDAO>2.0.CO;2-H
p. 565-574

H. M. Polemarchakis

Under the assumption that demand behavior depends on intertemporal preferences as well as (point) expectations concerning future prices, it is demonstrated that under plausible conditions rationality imposes no observable restrictions on the demand function and expectations and preferences are observationally indistinguishable.

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