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From Marginal Utility to Revealed Preference

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  • Marek Hudík

Abstract

This paper provides an exposition of the standard model of economic choice, applying Popper's method of rational reconstruction. It emphasizes that the explanation of downward-sloping demand curve, which is the original explicandum of this model, does not entail explanation of choice as such. Two alternative variants of the model of are considered: one based on the notion of diminishing marginal utility and the other on the concept of ordinal utility. Each variant is understood as a tentative solution to a theoretical problem and clarifies why the former is replaced by the latter. It also shows how the latter relates to consumer preferences and choices and why choices remain unexplained by the model.

Suggested Citation

  • Marek Hudík, 2013. "From Marginal Utility to Revealed Preference," E-LOGOS, Prague University of Economics and Business, vol. 2013(1), pages 1-19.
    • Handle: RePEc:prg:jnlelg:v:2013:y:2013:i:1:id:341:p:1-19
    DOI: 10.18267/j.e-logos.341
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    References listed on IDEAS

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    1. Varian, Hal R, 1982. "The Nonparametric Approach to Demand Analysis," Econometrica, Econometric Society, vol. 50(4), pages 945-973, July.
    2. Jacob Viner, 1925. "The Utility Concept in Value Theory and Its Critics," Journal of Political Economy, University of Chicago Press, vol. 33(6), pages 638-638.
    3. Allen Oakley, 1994. "Classical Economic Man," Books, Edward Elgar Publishing, number 340.
    4. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    5. Jacob Viner, 1925. "The Utility Concept in Value Theory and Its Critics," Journal of Political Economy, University of Chicago Press, vol. 33(4), pages 369-369.
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