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The Revealed Preferences of a Government Bureaucracy: Theory

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  • Daniel McFadden

Abstract

A method is developed for inferring, from the consequences or outcomes of organizational decisions, an implicit choice criterion such that the organization behaves as if it were following this decision rule. The method is quantified for the case of a public bureaucracy facing discrete alternatives, and is applied in a study of the decision rules underlying freeway route selection by a state division of highways. Tests are carried out on the form of the benefit-cost calculus utilized by the bureaucracy, on the implicit evaluation of indirect benefits and costs, and on the influence of political factors on routing decisions.

Suggested Citation

  • Daniel McFadden, 1975. "The Revealed Preferences of a Government Bureaucracy: Theory," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 401-416, Autumn.
  • Handle: RePEc:rje:bellje:v:6:y:1975:i:autumn:p:401-416
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