Showing papers on "Revealed preference published in 1982"

Samuelson and Consumption Theory

Abstract: The task of reviewing a body of work as prodigious as Paul Samuelson’s is so awesome that I confine myself in this essay and its sequel (Chapter 11) to only a small portion of his work: consumption theory and welfare economics. In the present paper I take up two branches of consumption theory that stem from quite different traditions: (1) revealed preference and the integrability problem and (2) the measurement of individual welfare. I try to show how Samuelson’s contributions have led to a complete transformation of thought in both branches and have laid the basis for a synthesis of the two, allowing for the construction of utility functions and welfare measures that are firmly based on market observations of individual demand behavior.

Samuelson and Welfare Economics

Abstract: In this essay I try to show how Samuelson, in four major works, has made a unique contribution that has set up welfare economics as a separate discipline: the study of the relationships between economic policies and value judgments This contribution, which grew out of Berg-son’s seminal work, has consisted of setting up a formal framework for the description and classification of value judgments and the analysis of their relationships to economic systems and policies By an exact example I make precise his point that an improvement in potential welfare can bring about a reduction in actual welfare in terms of some value judgments I also go through the detailed argument to show how separability of the social ordering leads to the possibility of optimal decentralized decision making according to that ordering I finally make a plea for a “revealed preference” approach to welfare economics and indicate ways in which the structure Samuelson has built can be used to determine configurations of empirical assumptions and implicit value judgments that are consistent with observed economic systems and policies

Revealed Preference after Samuelson

Abstract: The first and fundamental paper of P. A. Samuelson on revealed preference theory (1937) is now almost forty-five years old. He must have been barely twenty when it was written. One feels, nevertheless, that revealed preference has not just been a youthful interest, but has remained very close to his heart. He has written on it repeatedly (e.g., 1948, 1950), it features prominently in his Nobel Laureate lecture, and it was chosen by him as the subject of his 1973 Gibbs lecture at the American Mathematical Society meetings. Revealed preference is as founda-tional and purely theoretical a subject as one can find, and one cannot help thinking that this is part of its fascination. Indeed, of how many topics can it be said that, to paraphrase what Samuelson wrote in the Georgescu-Roegen Festschrift, people will be discussing them a hundred years from now? Certainly, the pure theory of rational choice is one, and I hope that it will be an appropriate appreciation of Samuelson’s contributions if I devote these few pages to giving a nonscholarly and nonex-haustive account of some of the developments that his seminal revealed preference work inspired — to show, in a word, that if one starts the clock in 1937, his prediction has already become almost half fulfilled.

The Dynamic Interdependence Between Information, Valuation, and Production in a Society

Abstract: Economic theory would not be on the level it is now without the numerous and outstanding contributions of Paul A. Samuelson. He is one of the very few scholars who are specialists as well as generalists in many fields. He has pushed the frontier of economic knowledge into previously unknown regions, and he has maintained a general view of economics in its entirety as well as of the interrelations between the economic, social, and political aspects of society. Thus, even where he opened up a new field, as in the case of consumer demand theory in general and especially in revealed preference theory (see Samuelson 1938, 1947, p. 109 ff.), he knew the limitations of that approach. The theory, as he developed it and as it stands now, assumes a given state of preferences (or valuations) for each person and treats them as independent from other persons’ preferences and from the production activities of the economy. This can be considered only as a first approximation in the very short run. Samuelson stated that explicitly:

The Contributions of Paul A. Samuelson to Economic Analysis: A Revealed Preference Approach

Abstract: One of Paul Samuelson’s important contributions to economic theory is the revealed preference approach to consumer demand, under which underlying and unobservable preferences are revealed by actual market choices. The purpose of this note is to apply a similar approach to evaluate Samuelson’s own contributions to economic analysis. Just as consumers make market choices in purchasing certain goods and not others at certain prices, economic theorists make choices in citing certain articles and not others in their publications. Thus a simple tabulation of frequently cited articles would reveal which works have had the greatest impact, with the number of times cited a crude measure of the degree of their impact. Fortunately, the Social Science Citation Index can be used to obtain such a tabulation.