[The economic theory of individual choice most frequently assumes that individual preferences are weak orders; this implies, among other things, a virtually perfect discriminating power on the part of individual decision makers. R. D. Luce's theory of semiorders generalizes the weak order concept to allow imperfect discrimination when choices are close. This paper examines the demand implications of the semiorder axioms and states conditions on demand that are necessary and sufficient for the revealed ordering to be a semiorder.]

HANS KEIDING of the University of Copenhagen has pointed out that Theorem (3.1) of our recent paper [1] is false as stated. In particular he has illustrated that when n = 2, using the notation of [1], one can construct a proper (1) correspondence Z: S2 -> P(R2) satisfying Definition (3.3) and such that Z(p) c 4th quadrant, for each p E S2. By Walras' Law this means Z'(p) 0 only when p = (1, 0). Thus, if S c Sn satisfies Z(p) s 0 for all p E S, then S = {(0, 1)}, which is not a subset of full dimensionality in Sn. We remedy this by adding to Definition (3.3) the economically innocuous assumption that if a good's price be zero the excess demand for it will be positive:

Much of the development of economic theory has been based on assumptions that credit economic agents with perfect discriminating power and perfect consistency in their choice behavior, but recently a range of less restrictive psychological choice theories has been introduced into economic analysis. These theories may be classed into two typesthose that treat preference (and hence choice) as a probabilistic phenomenon, and those that retain the deterministic structure of the traditional analysis but relax in some way the assumption that individual preferences be transitive. in previous work others have examined the implications for economic equilibrium of assuming preferences to be random; our purpose in this paper is to examine the equilibrium implications of a particularly attractive deterministic choice theory, that of semiordered preferences. We first examine an exchange ec such an economy is shown to have an equilibrium, and further, for interior equilibria, it is shown that a range of allocations to consumers is consistent with equilibrium. Finally, we show that in a semiorder market economy the set of price equilibria has a non-empty interior relative to the price simplex.