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Revealed Preference Theory

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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.

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  1. http://link.springer.com/referencework/10.1057/978-1-349-95121-5

    Marcel K. Richter

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  1. Marcel K. Richter
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Richter, M.K. (2018). Revealed Preference Theory. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_1648

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