The Non-Existence of Representative Agents

@article{Jackson2015TheNO,
  title={The Non-Existence of Representative Agents},
  author={Matthew O. Jackson and Leeat Yariv},
  journal={Macroeconomics: Aggregative Models eJournal},
  year={2015}
}
We characterize environments in which there exists a representative agent: an agent who inherits the structure of preferences of the population that she represents. The existence of such a representative agent imposes strong restrictions on individual utility functions, requiring them to be linear in the allocation and additively separable in any parameter that characterizes agents' preferences (e.g., a risk aversion parameter, a discount factor, etc.). Commonly used classes of utility… 
Stochastic Representative Agent
Consider the aggregation of a collection of individual stochastic behaviors that fit a given stochastic choice model. We say that such a model has a representative agent if their aggregate stochastic
A Note on Jackson and Yariv ( 2017 )
In this short note, I present and prove two theorems that characterize environments in which there exists a representative agent. Both theorems are variants of the main results in the working paper
Mikropodstawy prawdziwe i fałszywe
This article presents an overview and critique of the two leading macroeconomic approaches from the last 70 years: reasoning using high-level aggregates detached from individuals and their choices,
Poverty is no crime, but a problem to study
(Nobel Memorial Prize in economics 2015 — Angus Deaton) The Nobel Prize in Economics in 2015 was awarded to Angus Deaton for his studies of consumer behavior, poverty and welfare. The paper provides
Masters Thesis: Modelling and Control of a Dynamical Labour Market System
Labour market economics has been gaining more and more attention over the years, due to increasing job insecurity. There is a growing demand for the improvement of labour market models. Labour market
Collective Proofreading and the Optimal Voting Rule
ABSTRACT Policy decisions often involve a repeated proofreading process before implementation. We present a dynamic model of proofreading decisions by a heterogeneous committee before implementing a
Monotone Additive Statistics
The expectation is an example of a descriptive statistic that is monotone with respect to stochastic dominance, and additive for sums of independent random variables. We provide a complete
The economic gains of closing the employment gender gap: Evidence from Morocco
The present paper sheds new light on the growth implications of gender inequalities in the Moroccan labour market. We confront two different approaches. The first one is based on firm data to
Variable time preference
...
...

References

SHOWING 1-10 OF 48 REFERENCES
Can a Representative Agent Model Represent a Heterogeneous Agent Economy
Accounting for observed fluctuations in aggregate employment, consumption, and real wage using the optimality conditions of a representative household requires preferences that are incompatible with
Stochastic Representative Agent
Consider the aggregation of a collection of individual stochastic behaviors that fit a given stochastic choice model. We say that such a model has a representative agent if their aggregate stochastic
The paradox of the Bayesian experts and state-dependent utility theory
Excess Demand Functions
It is clear that a demand function derived from an agent’s preference preordering cannot be completely arbitrary . For instance it has to reflect the transitivity of the preference preordering . As
Quantal response equilibria with heterogeneous agents
TLDR
This result demonstrates a fundamental difference between a representative agent and truly heterogeneous quantal responders and suggests that when fitting quantal response specifications to aggregate data from a population of subjects, the noise terms should be allowed to be jointly dependent across actions.
Pareto Optima and Competitive Equilibria with Adverse Selection and Moral Hazard
This paper explores the extent to which standard, general equilibrium analysis of Pareto optima and of competitive equilibria can be applied to environments with moral hazard and adverse selection
Asset Pricing with Heterogeneous Consumers
Empirical difficulties encountered by representative-consumer models are resolved in an economy with heterogeneity in the form of uninsurable, persistent, and heteroscedastic labor income shocks.
UNDERSTANDING SOCIAL PREFERENCES WITH SIMPLE TESTS
Departures from self-interest in economic experiments have recently inspired models of “social preferences”. We design a range of simple experimental games that test these theories more directly than
Intertemporal Asset Pricing with Heterogeneous Consumers and without Demand Aggregation
Consumer heterogeneity raises two problems in the derivation of the intertemporal asset-pricing model. First, it is implausible to assume that all assets' returns are multivariate normal (or exhibit
Saving, Risk Sharing, and Preferences for Risk
Saving decisions are made jointly by household members who generally earn risky incomes. Consequently, to interpret saving patterns it is crucial to analyze the relationship between intrahousehold
...
...