Abstract
Perhaps, Paul Samuelson really did not intend to ground economic theory on observable behavior because, as we observe in the revealed-preference theory, we consider only the prices and particular quantities instead of looking into preferences and other motivating factors when accounting for a finite set of prices and a corresponding set of choices. Through this situation, we observe how Samuelson assumed that an individual's preferences remains unchanged over time. By analyzing the genalized axiom of revealed preference (GARP) and how, when this is satisfied, it may lead to utility maximization, this chapter attempts to examine whether it is acceptable or not to infer preferences from observations of choice behavior.
Original language | English (US) |
---|---|
Title of host publication | The Foundations of Positive and Normative Economics |
Subtitle of host publication | A Hand Book |
Publisher | Oxford University Press |
ISBN (Electronic) | 9780199851768 |
ISBN (Print) | 9780195328318 |
DOIs | |
State | Published - Oct 3 2011 |
Keywords
- Choice behavior
- Economic theory
- Observable behavior
- Paul Samuelson
- Preferences
ASJC Scopus subject areas
- General Economics, Econometrics and Finance