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Preference Revelation

February 27, 2017 2 comments

The late Paul A. Samuelson was the first Nobel laureate in economics and is widely regarded to be the most outstanding American economist to date. He wrote many papers that had a profound influence on the thinking of economists but he wrote one paper that, to me, is a great tool for all of us, not just economists. The paper is entitled “Consumption Theory in Terms of Revealed Preference” and, in a nutshell, here is what it says. If you want to know what another person is up to, watch what they do because you can, from their actions, infer their motives or preferences. Below┬áis an example of how useful it can be to observe people’s actions when matched against what they say. Read more…

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