65. REVEALED PREFERENCE THEORY | STRONG & WEAK AXIOM OF REVEALED PREFERENCE [ SARP & WARP THEORY ]
#revealedpreferncetheory #sarp #warp #microeconomics
Revealed preference theory, pioneered by economist Paul Samuelson, is a method of analyzing choices made by individuals, mostly used for comparing the influence of policies on consumer behavior. Revealed preference models assume that the preferences of consumers can be revealed by their purchasing habits.
Revealed preference theory arose because existing theories of consumer demand were based on a diminishing marginal rate of substitution (MRS). This diminishing MRS relied on the assumption that consumers make consumption decisions to maximise their utility. While utility maximisation 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 defining utility functions by observing behaviour.
Therefore, revealed preference is a way to infer the preferences of individuals given the observed choices. It contrasts with attempts to directly measure preferences or utility, for example through stated preferences. Taking economics to be an empirical subject, there is the issue that one cannot observe preferences. In other words, according to advocates of revealed preference theory "It is not what you say, it is what you do that reveals what you want."
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Thank you! 🙌
Good effort 👍
Thank you for making it easy to understand....😊😊
@economicspedia7096
3 жыл бұрын
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It is good explanation madam but still i have confusion about WARP
@economicspedia7096
2 жыл бұрын
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Your teaching teach me a lot thanks from my bottom of heat
@economicspedia7096
2 жыл бұрын
Hello Jahirul, thank you for your kind words for Economics Pedia.
You have explained the theory very well 👌🏻thank you
@economicspedia7096
Жыл бұрын
Glad it was helpful!
thanks ma'am for the information
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3 жыл бұрын
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Really Good. Keep it up
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3 жыл бұрын
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Good explanation ma'am🌻
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2 жыл бұрын
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Although you are putting in the effort to explain this well, however, you have missed that given a price vector, these conditions hold. Incomplete definitions will lead to negative consequences because students will learn something incorrectly, leading to weaker foundations and concepts.
Thank you so much. But where is SARP ?
Very nice explanation.
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3 жыл бұрын
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Thanks mam
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3 жыл бұрын
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very good !!!!!!!!!!!!!!!!!!!!!!!!!!
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3 жыл бұрын
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Wow!!
How are you advocating for the superior set with a given income/budget line as any bundle in the box drawn is unachievable?
Nice methodology mam but I m still confused in WARP, plz clear this point plz
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3 жыл бұрын
We would be taking up sessions on WARP separately if you are seeking. Keep watching Economics Pedia for more sessions. Thank you.
@WijthaGayan
Жыл бұрын
give it time untie end of day you under standard
He has revealed his preference for apples, except he really prefers oranges, but his daughter asked him to pick up some apples..... etc. etc. etc.
but till also i have not gotted my ans...once more clearly
there is glitch in ur explanation i suppose. not giving clarity. especially to the warp
You're pretty.
@ashooashee9598
3 ай бұрын
Thats y u watching her vedio
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