The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Revealed Preference Theory

  • Marcel K. Richter
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_1648

Abstract

Economists do not observe preferences. They may, however, observe demand behaviour – the choices made by consumers. Is there a way for economists to tell whether the observed behaviour is generated through the maximization of a preference relation or utility function? Since most economic theories are ultimately based on a consumer who maximizes a preference or utility, the question is clearly important for developing and testing theories.

JEL Classifications

D1 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Marcel K. Richter
    • 1
  1. 1.