Display:
If one defines utility as what any action increases, the definition becomes tautological. And pretty uninteresting. Anything can then be described as utility.

Funny you'd say that, because that's precisely what Economists do... when you cannot determine preferences to predict economic behaviour, use economic behaviour to infer preferences. But then you can no longer predict economic behaviour, although you can pretend that you can...

Revealed preference theory came about because the theories of consumer demand were based on a diminishing marginal rate of substitution. This diminishing MRS is based on the assumption that consumers make consumption decisions based on their intent to maximize their utility. While utility maximization was not a controversial assumption, the underlying utility functions could not be measured with great certainty. Revealed preference theory was a means to reconcile demand theory by creating a means to define utility functions by observing behavior.


Can the last politician to go out the revolving door please turn the lights off?
by Migeru (migeru at eurotrib dot com) on Thu Jul 26th, 2007 at 09:24:50 AM EST
[ Parent ]
... And adding another epicycle to the planetary orbits. Oh well.

But no, economists won't look at the other social sciences and see what they have to say about human behaviour. They ask the other social sciences to talk in Economics terms, but refuse to reciprocate.

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Thu Jul 26th, 2007 at 12:28:36 PM EST
[ Parent ]

Display:

Top Diaries

European nights

by DoDo - Dec 21, 13 comments

Yuletide thread

by Sven Triloqvist - Dec 24, 89 comments

Building the shadow Internet

by danps - Dec 18, 59 comments

Stories of wonder for Christmas

by stevesim - Dec 24, 7 comments

Copper-Bottomed Investment

by ChrisCook - Dec 22, 23 comments

Occasional Series