Julide Yazar

1
Interactive Computer Experiments with a Virtual
Consumer
Julide Yazar Department of Economics, Ohio
Wesleyan University
Revealed Preference Experiments
Application Insurance Market
Interview a Virtual Consumer HAL
Students ask HAL to make consumption choices for
different price and income values of their
choice. They use direct and indirect revealed
preference arguments to trap the indiffence curve
between the worse-off and better-off sets using
monotonicity and convexity assumptions.
Results are summarized in graphical form
Students ask HAL to rank consumption bundles and
use his answers to learn about his
preferences Monotonicity and (optional)
Convexity Assumptions Results are summarized in
graphical form Better Bundles
Worse Bundles User defined utility
functions or random choices Special cases
Perfect Complements and Perfect Substitutes
Insurance for HAL ( premium,
deductible) Accident with probability No
Accident with probability
Given HALs driving record (probability of
accident) and survey results, design the
following for the insurance company Optimal
Insurance Policy (Premium / Deductible) Optimal
Insurance Policy for given deductible/ premium
Worksheets
Implementation
Software developed in MATLAB. It can be compiled
using MATLAB compiler for various platforms (Win,
MacOS X, Unix). The compiled version does not
require MATLAB software at the student computer.
A Java version is planned for web deployment.