Talk:Demonstrated preference

Economics Joke #l

This should be added to the entry...

Economics Joke #l: Two economists walked past a Porsche showroom. One of them pointed at a shiny car in the window and said, "I want that." "Obviously not," the other replied. - David D. Friedman, How Economists Think

--Xerographica (talk) 20:17, 30 November 2012 (UTC)[reply]

Buchanan vs Samuelson - Please Read

BEFORE you make a substantial edit to this article...in order for your edit to actually be constructive...you have to actually understand the concept. In order to actually understand the concept you have to read the debate between Buchanan and Samuelson as Maricano relates in this paper... Why markets do not fail. Buchanan on voluntary cooperation and externalities. Once you've read that...then please read Ginsburg's and Wright's paper...Behavioral Law and Economics: Its Origins, Fatal Flaws, and Implications for Liberty. Then, and only then, can we have a constructive discussion, based on RS, on how to improve this entry. --Xerographica (talk) 17:07, 8 January 2013 (UTC)[reply]

Xerographica

The content which I deleted is not in the form of an encyclopedia article or exposition of Demonstrated Preference. Rather it is, as titled, a collection of anecdotal assertions and reflections. I deleted it because it does not conform to the mandated form or content of a Wikipedia article. Moreover as I said in the edit comment there is no indication in the material that its sources were referring to or even aware of "demonstrated preference." If you have broader knowledge of this subject and are able to re-cast this material or add other material properly cited in the form of a descriptive article, please do so -- your contribution would be welcome. Otherwise this content cannot remain in its current form. Thanks.'''SPECIFICO''' (talk) 17:29, 8 January 2013 (UTC)[reply]

Revealed preference

What's the difference between this and revealed preference? Volunteer Marek 06:11, 31 January 2013 (UTC)[reply]

User:Xerographica/Preference_revelation --Xerographica (talk) 06:18, 31 January 2013 (UTC)[reply]

Can you answer the question? Volunteer Marek 06:27, 31 January 2013 (UTC)[reply]

In the private sector...our spending decisions reveal our preferences. "Preference" is another word for "demand". Because we can't shop for ourselves in the public sector...the government has no way of knowing how much of each public good to supply. Numerous economists have tried to figure out how to "divine" the true preferences of the public in order for the government to determine the optimal supply of public goods. They have all tried to solve the preference revelation problem. Samuelson's revealed preference theory is his attempt to guess/predict/calculate your true preferences BEFORE you make a spending decision...while demonstrated preference is the general concept that your true preferences can only be revealed AFTER you spend your time/money on something. --Xerographica (talk) 06:39, 31 January 2013 (UTC)[reply]

revealed preference has been repurposed by Masalih (talk · contribs) to be the theory behind preference revelation. It used to be the case that revealed preference differed only from demonstrated preference in that the preference is not presumed to be static. — Arthur Rubin (talk) 07:18, 31 January 2013 (UTC)[reply]

The first sentence of revealed preference is...Revealed preference theory, pioneered by American economist Paul Samuelson, is a method for comparing the influence of policies on consumer behavior. Revealed preference theory IS Samuelson's very notable theory. As far as I can tell...the article has not be repurposed for a more general discussion of the topic nor should it be. --Xerographica (talk) 07:27, 31 January 2013 (UTC)[reply]

Your personal talk page definition of 'demonstrated preference' is just exactly the definition of revealed preference, minus your weaselly attempt to associate it purely with prediction (rather than observation). Revealed preference allows you to identify unobserved preferences based on observed choices. -An Economist 24.61.40.129 (talk) 19:04, 2 February 2013 (UTC)[reply]

If you're going to say that you're an economist...if you're going to throw out an appeal to authority...then please don't half ass it. Link me to your website and prove that it's yours. Let me judge for myself exactly how much of an authority you truly are on the subject. The thing is...I love reading what the experts have to say about subjects...which is why I'm fairly confident of my own perspective on the subject. Am I 100% on the details? Certainly not...but I'm close enough to know that Samuelson was willing to, as Hayek said, "assume the problem away and to disregard everything that is important and significant in the real world." Buchanan, Friedman, Hayek and numerous other economists were not willing to make those same "conceited" assumptions...User:Xerographica/The Fatal Conceit. --Xerographica (talk) 19:31, 2 February 2013 (UTC)[reply]

Calling something 'conceited,' and dropping an inane quote, doesn't make it so. I'm sorry you've been brainwashed by mises.org, but that doesn't mean Wikipedia has to suffer for it. The fact that the Revealed preference page, which is about a serious, important concept, links to this garbage page is a real sad indicator about the quality of Wikipedia pages about economics. 24.61.40.129 (talk) 21:58, 2 February 2013 (UTC)[reply]

That's amazing! You guessed that I love Mises.org! Wow, it's miraculous how skilled you are at divining my true preferences! Samuelson must have taught you everything you know! I should give you all my money so that you can be my personal shopper! Wealth will surely not be destroyed...

Since Samuelson had insisted on the difficulty to incite individuals to reveal their preferences, Buchanan had the impression that the core of their disagreement was a matter of “revealed preferences and concealed indifference”. It appeared to him that Samuelson had no problem in that matter because he certainly relied on a theory of revealed preferences. Thus, Samuelson was right and his sufficient condition necessary only under the assumption that “individual ordinal preferences can be derived … by revealed choices”; emphasis in original., that is if one assumed that individual utility functions could be derived objectively and exteriorly from the observation of choices. Collective choices could be made by respecting individual choices. By contrast, and anticipating what he wrote in “What Should Economists Do?” he noted that for the first time, Buchanan believed that “individual ordinal utility function exist independently of choice”. Under this assumption, individual choices do not reveal marginal rates of substitution and the prices of collective goods cannot be decided by external observers. Then, the only way to guarantee the respect of individual preferences, to assure that “[t]he amounts actually paid are made equal to the amounts willingly paid” is to add Buchanan's necessary condition; without this condition, Samuelson's sufficient conditions could be satisfied but individual marginal conditions would not be respected. - Alain Marciano Why markets do not fail

Despite all of the discussion about the unrealism of these assumptions, they remain paradigmatic for economists. Decisions on the demand-supply of public goods are made through political, not market, institutions, and there is no analogue to competitive order that eases the analytical task. - James M. Buchanan

Individuals do not act so as to maximize utilities described in independently existing functions. They confront genuine choices, and the sequence of decisions taken may be conceptualized, ex post (after the choices), in terms of "as if" functions that are maximized. But these "as if" functions are, themselves, generated in the choosing process, not separately from such process. - James M. Buchanan, Order Defined in the Process of its Emergence

Kahn and Baron’s (1995) results represent additional evidence in support of psychologists’ assertion that contrary to rational choice theory, people do not always hold stable and clearly ordered preferences that are simply retrieved at the moment of the choice. On the contrary, according to psychology research, most of the time, people do not know their preferences before their decision-making task, but they construct them on the spot during the decision process; therefore, preferences are subject to contextual influences (Feldman and Lynch 1988; Payne, Bettman, and Johnson 1993). - Simona Botti and Sheena S. Iyengar, The Dark Side of Choice

The number of cases where economists have argued that the market is imperfect and therefore recommended that government should deal with the problem is very large. The British economist A.C. Pigou and the American Professor Paul Samuelson both made this error. They assumed that government reaches a perfect solution. No one really believes this, but economists frequently recommend government action simply because the private market creates externalities, and hence is not likely to function perfectly. - Gordon Tullock

The central problem is of revelation of preferences. How can we make the public reveal its preferences between public and private goods and among public goods? The Samuelson fiction of pure nonexcludable goods is just that. - Meghnad Desai, Providing Global Public Goods

Thus while Samuelson is technically on safe ground in his solution of the public goods problem, the assumptions required make the solution useless for policy purposes. - Meghnad Desai, Providing Global Public Goods

For example, the discussion assumes that the community of consumers has a well-functioning, formal state structure. Like a benevolent dictator, this state somehow guesses the preferences that people have for public goods. - Meghnad Desai, Providing Global Public Goods

Expositions of welfare economics typically assume that the analyst possesses knowledge that is in no one’s capacity to possess. A well-intentioned administrator of a corrective state would face a vexing problem because the knowledge he would need to act responsibly and effectively does not exist in any one place, but rather is divided and dispersed among market participants. Such an administrator would seek to achieve patterns of resource utilization that would reflect trades that people would have made had they been able to do so, but by assumption were prevented from making because transaction costs were too high in various ways. A corrective state that would be guided by the principles and formulations of welfare economics would be a state whose duties would exceed its cognitive capacities. - Richard Wagner

Our discontent with the original Samuelson rule stems from its failure to account for tax payers’ response to public expenditure and taxation. The rule was derived for an omnipotent, omniscient and benevolent government, a government which, by definition, need not consider people’s responses to its actions. Drop that assumption, restrict government to the choice of tax rates and public expenditures, and the response to its actions must be taken into account. - Dan Usher, Should the Samuelson Rule Be Modiﬁed to Account for the Marginal Cost of Public Funds?

Samuelson's theory is important and serious...but basing public economics on pure fiction is the epitome of garbage. Oh yeah, you forgot to link me to your website. I guess you can't guess my true preferences that well after all. Good thing I didn't give you my money. --Xerographica (talk) 23:06, 2 February 2013 (UTC)[reply]

Xero, you are being rude and making personal attacks on the Economist IP, whose comments here are apt and substantive. Please be warned I may seek administrative action to put an end to your disruptive behaviour. SPECIFICO talk 23:09, 2 February 2013 (UTC)[reply]

The "economist" said that I was brainwashed by Mises...how is that not a personal attack? Yet, you accuse me of personally attacking him. Can you please copy and paste my personal attack? I'd like to add it to my collection... Wikipedia_talk:No_personal_attacks#Willfully_ignoring_reliable_sources. --Xerographica (talk) 23:37, 2 February 2013 (UTC)[reply]

This discussion is (should be) about improving the article, not about one IP or particular comments made by the IP. For more info, see WP:HUMAN and WP:NOTPEOPLE. Get back on track. – S. Rich (talk) 00:14, 3 February 2013 (UTC)[reply]

AfD for Demonstrated preference ?

I raised the possibility of an AfD for this article here [1] SPECIFICO talk 04:23, 2 February 2013 (UTC)[reply]