The notion of ‘revealed preference’ is unclear and should be abandoned. Defenders of the theory of revealed preference have misinterpreted legitimate concerns about the testability of economics as the demand that economists eschew reference to (unobservable) subjective states. As attempts to apply revealed-preference theory to game theory illustrate with particular vividness, this demand is mistaken.

This paper defends revealed preference theory against a pervasive line of criticism, according to which revealed preference methodology relies on appealing to some mental states, in particular an agent’s beliefs, rendering the project incoherent or unmotivated. I argue that all that is established by these arguments is that revealed preference theorists must accept a limited mentalism in their account of the options an agent should be modelled as choosing between. This is consistent both with (...) an essentially behavioural interpretation of preference and with standard revealed preference methodology. And it does not undermine the core motivations of revealed preference theory. (shrink)

A much discussed topic in the theory of choice is how a preference order among options can be derived from the assumption that the notion of ' choice' is primitive. Assuming a choice function that selects elements from each finite set of options, Arrow (Económica 26: 121-127,1959) already showed how we can generate a weak ordering by putting constraints on the behavior of such a function such that it reflects utility maximization. Arrow proposed that rational agents can be modeled (...) by such choice functions. Arrow's standard model of rationality has been criticized in economics and gave rise to approaches of bounded rationality. Two standard assumptions of rationality will be given up in this paper. First, the idea that agents are utility optimizers (Simon). Second, the idea that the relation of ' indifference' gives rise to an equivalence relation. To account for the latter, Luce (Econometrica 24: 178-191, 1956) introduced semi-orders. Extending some ideas of Van Benthem (Pac Philos Q 63: 193-203, 1982), we will show how to derive semi-orders (and so-called interval orders) based on the idea that agents are utility satisficers rather than utility optimizers. (shrink)

Revealed preference approaches to modelling agents’ choices face two seemingly devastating explanatory objections. The no self-explanation objection imputes a problematic explanatory circularity to revealed preference approaches, while the causal explanation objection argues that, all things equal, a scientific theory should provide causal explanations, but revealed preference approaches decidedly do not. Both objections assume a view of explanation, the constraint-based view, that the revealed preference theorist ought to reject. Instead, the revealed (...) class='Hi'>preference theorist should adopt a unificationist account of explanation, allowing her to escape the two explanatory problems discussed in this paper. (shrink)

The question of how to frame agential preferences in economics finds one caught between Scylla and Charybdis. If preferences are framed in as minimal and deflationary a manner as revealed preference theory recommends, the theory falls prey to objections about its predictiveness and explanatory power. Alternatively, if too many cognitive and causal intricacies are incorporated into the preference concept, revealed preference models will violate pragmatic norms of model construction, surrendering model simplicity and generality. This paper (...) charts a middle course, arguing that the path to salvation lies through an understanding of revealed preference models as program explanations. (shrink)

Since Varian (Econometrica 50:945–973, 1982; Review of Economic Studies 50:90–110, 1983) made checking for consistency with revealed preference conditions more accessible to empirical researchers; researchers have often used revealed preference procedures to test their maintained hypotheses and narrow the scope of their demand studies. The tests developed by Varian are for the direct utility function, while researchers estimating demand systems often find it convenient to model consumer behavior with an indirect utility function. Unfortunately structure revealed (...) in the direct utility function does not necessarily follow for the indirect utility function. To remedy this problem, we set forth conditions for checking consumer data for consistency with revealed preference conditions for minimization and weak separability of the indirect utility function. (shrink)

This essay gives necessary and sufficient conditions for recovering expected utility from choice behavior in several popular models of uncertainty. In particular, these techniques handle a finite state model; a model for which the choice space consists of probability densities and the expected utility representation requires bounded, measurable utility; and a model for which the choice space consists of Borel probability measures and the expected utility representation requires bounded, continuous utility. The key result is the identification of the continuity condition (...) necessary for the revelation of linear utility. (shrink)

This article explores rationalizability issues for finite sets of observations of stochastic choice in the framework introduced by Bandyopadhyay et al. (Journal of Economic Theory, 84(1), 95–110, 1999). It is argued that a useful approach is to consider indirect preferences on budgets instead of direct preferences on commodity bundles. A new rationalizability condition for stochastic choices, “rationalizable in terms of stochastic orderings on the normalized price space” (rsop), is defined. rsop is satisfied if and only if there exists a solution (...) to a linear feasibility problem. The existence of a solution also implies rationalizability in terms of stochastic orderings on the commodity space. Furthermore it is shown that the problem of finding sufficiency conditions for binary choice probabilities to be rationalizable bears similarities to the problem considered here. (shrink)

This paper examines methodological issues raised by revealed preference theory in economics: particularly contemporary revealed preference theory. The paper has three goals. First, to make the case that revealed preference theory is a broad research program in choice theory—not a single theory—and understanding this diversity is essential to any methodological analysis of the program. Second, to explore some of the existing criticisms of revealed preference theory in a way that emphasizes how the (...) effectiveness of the critique depends on the particular version of revealed preference under consideration. Finally, three additional criticisms are presented that are aimed specifically at contemporary revealed preference theory. (shrink)

Abstract: Don Ross’ Economic Theory and Cognitive Science (2005) provides an elaborate philosophical defense of neoclassical economics. He argues that the central features of neoclassical theory are associated with what he calls the Robbins-Samuelson argument pattern and that it can be reconciled with recent developments in experimental and behavioral economics, as well as contemporary cognitive science. This paper argues that Ross’ Robbins-Samuelson argument pattern is not in the work of either Robbins or Samuelson and in many ways is in conflict (...) with their own versions, and defenses, of neoclassical theory. (shrink)

Resumen: En el presente artículo se realiza una comparación crítica de dos enfoques sobre los fundamentos de la teoría microeconómica del comportamiento del consumidor, a saber: el enfoque utilitarista y el de la preferencia revelada. Se lleva a cabo un análisis de la preferencia revelada en el contexto de la introducción de restricciones a la función de elección en la teoría de la decisión. Se evalúan sus ventajas y limitaciones en contraste con el problema de la utilidad propio del punto (...) de vista subjetivista de la teoría utilitarista. Y se confronta la capacidad explicativa de los distintos modelos de agencia racional sobre las bases de las curvas de demanda. Asimismo, se desarrolla una crítica formal al método de la preferencia revelada en entornos estratégicos de decisión.: This article makes a critical comparison of two approaches to the foundations of the microeconomic theory of consumer behavior, namely: the utilitarian approach and that of the revealed preference theory. An analysis of revealed preference is carried out in the context of introducing restrictions to the choice function in decision theory. Its advantages and limitations are evaluated in contrast to the utility problem proper to the subjectivist point of view of utilitarian theory. And the explanatory capacity of the different models of rational agency is confronted on the bases of the demand curves. Furthermore, a formal critique of the revealed preference method is developed in strategic decision-making environments. (shrink)

We interpret solution rules on a class of simple allocation problems as data on the choices of a policy maker. We analyze conditions under which the policy maker’s choices are (i) rational (ii) transitive-rational, and (iii) representable; that is, they coincide with maximization of a (i) binary relation, (ii) transitive binary relation, and (iii) numerical function on the allocation space. Our main results are as follows: (i) a well-known property, contraction independence (a.k.a. IIA) is equivalent to rationality; (ii) every contraction (...) independent and other-c monotonic rule is transitive-rational; and (iii) every contraction independent and other-c monotonic rule, if additionally continuous, can be represented by a numerical function. (shrink)

This paper evaluates how Amartya Sen’s critique of revealed preference theory stands against the latter’s contemporary, ‘neo-Samuelsonian’ version. Neo- Samuelsonians have argued that Sen’s arguments against RPT are innocuous, in particular once it is acknowledged that RPT does not assume away the existence of motivations or other latent psychological or cognitive processes. Sen’s claims that preferences and choices need to be distinguished and that external factors need to be taken into account to analyze the act of choice then (...) appear to be irrelevant. However, while it is true that contemporary revealed preference theory partially evades Sen’s critique, I show that the latter is still relevant outside the restricted areas of consumer choice and market dynamics. In particular, Sen’s views regarding the importance of incomplete preferences and the multiplicity of levels of agency can hardly be integrated into the framework of CRPT. This is a significant limit, given the imperialistic claims of some of the proponents of the latter. (shrink)

It is shown that a fundamental question of revealed preference theory, namely whether the weak axiom of revealed preference (WARP) implies the strong axiom of revealed preference (SARP), can be reduced to a Hamiltonian cycle problem: A set of bundles allows a preference cycle of irreducible length if and only if the convex monotonic hull of these bundles admits a Hamiltonian cycle. This leads to a new proof to show that preference cycles (...) can be of arbitrary length for more than two but not for two commodities. For this, it is shown that a set of bundles satisfying the given condition exists if and only if the dimension of the commodity space is at least three. Preference cycles can be constructed by embedding a cyclic $(L-1)$ -polytope into a facet of a convex monotonic hull in $L$ -space, because cyclic polytopes always admit Hamiltonian cycles. An immediate corollary is that WARP only implies SARP for two commodities. The proof is intuitively appealing as this gives a geometric interpretation of preference cycles. (shrink)

This note comments on Professor Majumdar’s concept of an individual who seeks to change his own preferences over time. It is argued that while one can formulate “revealed preference axioms“ which will rationalize the choices of Professor Majumdar’s individual, it is unlikely that the choice of such an individual will reveal his preferences.

The standard economic theory of choice is extended to accommodate a particular form of akratic choice. The empirical content of the new theory is fully characterized. A characterization of revealed akratic choice, in terms of observable choice only, is also provided. These results are consistent with the viewpoint that akrasia is a concept that can be empirically substantiated.

Subjunctive conditionals are fundamental to rational decision both in single agent and multiple agent decision problems. They need explicit analysis only when they cause problems, as they do in recent discussions of rationality in extensive form games. This paper examines subjunctive conditionals in the theory of games using a strict revealed preference interpretation of utility. Two very different models of games are investigated, the classical model and the limits of reality model. In the classical model the logic of (...) backward induction is valid, but it does not use subjunctive conditionals; the relevant subjunctive conditionals do not even make sense. In the limits of reality model the subjunctive conditionals do make sense but backward induction is valid only under special assumptions. (shrink)

We consider choice correspondences that assign a subset to every choice set of alternatives, where the total set of alternatives is an arbitrary finite or infinite set. We focus on the relations between several extensions of the condition of independence of irrelevant alternatives on one hand, and conditions on the revealed preference relation on sets, notably the weak axiom of revealed preference, on the other hand. We also establish the connection between the condition of independence of (...) irrelevant alternatives and so-called strong sets; the latter characterize a social choice correspondence satisfying independence of irrelevant alternatives. (shrink)

In economics, it has often been claimed that testing choice data for violation of certain axioms-particularly if the choice data is observed under laboratory conditions-allows conclusions about the validity of certain preference axioms and the neoclassical maximization hypothesis. In this paper I argue that these conclusions are unfounded. In particular, it is unclear what exactly is tested, and the interpretation of the test results are ambiguous. Further, there are plausible reasons why the postulated choice axioms should not hold. Last, (...) these tests make implicit assumptions about beliefs that further blur the interpretations of the results. The tests therefore say little if anything about the validity of certain preference axioms or the maximization hypothesis. (shrink)

Whereas the literature on choice overload has shown that people tend to defer their choice or experience less satisfaction under choice proliferation, this paper aims to test how the profusion of choice directly affects individuals’ revealed preferences over options. To do so, we run an experiment where subjects have to compare familiar and unfamiliar options under different choice contexts. We hypothesize that, as the choice set expands, the decisions become harder and more costly and subjects may find familiar items (...) relatively more attractive. Our results provide clear evidence of set size dependence of revealed preferences: Subjects prefer familiar items more frequently in larger choice sets. This evidence is robust to a number of experimental variations and statistical controls. (shrink)

This paper considers lexical combinations of choice functions where at least one is interpreted as arising from a norm. It is shown that in for all possibilities in which a norm is present, in general final choice may be consistent with preference optimization, but that it need not be so. It is concluded therefore that a fruitful approach to understanding the effect of norms on choice is to consider particular classes of norms rather than norms in general as in (...) the work by Wulf Gaertner among others. (shrink)

We introduce an Absolute (Relative) Time-consistent Axiom of Revealed Preference which characterizes the consistency of a choice function with the property of absolute (relative) time-consistency and impatience. The axiom requires that the absolute (relative) time-consistent and impatient closure of the revealed preference relation does not conflict with the strict revealed preference relation.

The phenomenon of weakness of will – not doing what we perceive as the best action – is not recognized by neoclassical economics due to the axiomatic assumptions of the revealed preference theory (RPT) that people do what is best for them. However, present bias shows that people have different preferences over time. As they cannot be compared by the utility measurements, economists need to normatively decide between selves (short- versus long-term preferences). A problem is that neoclassical economists (...) perceive RPT as value-free and incorporate present bias within the economic framework. The axiomatic assumption that people do what is best for them leads to theoretical and practical dilemmas. This work examines weakness of will to resolve some shortcomings of RPT. The concept of intention is used to provide multiple self conception with the framework to decide between selves, which had not been done before. The paper concludes that individuals should not always follow their revealed preferences (desires) but the intentions (reason) because the latter indicates what people really want. (shrink)

This paper challenges Mäki's argument about commonsensibles by offering a case study from contemporary microeconomics – contemporary revealed preference theory (hereafter CRPT) – where terms like "preference," "utility," and to some extent "choice," are radical departures from the common sense meanings of these terms. Although the argument challenges the claim that economics is inhabited solely by commonsensibles, it is not inconsistent with such folk notions being common in economic theory.

(2) Mental preferences: These describe the mental attitude of an individual toward the objects. They can be defined in contexts which do not involve actual choice. In particular, preferences can describe tastes (such as a preference for one season over another) or can refer to situations which are only hypothetical (such as the possible courses of action available to an individual were he to become Emperor of Rome) or which the individual does not fully control (such as a game (...) situation in which a player has preferences over the entire set of outcomes). (shrink)

I distinguish several doctrines that economic methodologists have found attractive, all of which have a positivist flavour. One of these is the doctrine that preference assignments in economics are just shorthand descriptions of agents' choice behaviour. Although most of these doctrines are problematic, the latter doctrine about preference assignments is a respectable one, I argue. It doesn't entail any of the problematic doctrines, and indeed it is warranted independently of them.

Determining the precise nature of the connection between preference, choice, and welfare has arguably been the central project in the field of welfare economics, which aims to offer a proper guide for economists in the making of policy decisions that affect people’s welfare. The two leading approaches here historically – the revealed preference and latent preference approaches – seem equally incapable of so guiding economists. I argue that the deadlock here is due to welfare economists’ failure (...) to recognize a crucial distinction between two senses of “preference.” I analyze and defend these senses of “preference,” and argue that each shares a close connection with just one of choice and welfare. This analysis reveals how economists should conceive of both the connections between “preference,” choice, and welfare, and the proper roles of these concepts in welfare economics. I conclude by showing this analysis to best explain the plausibility of two leading alternative approaches from Hausman and Sugden. (shrink)

Racial preferences are among the most contentious issues in our society, touching on fundamental questions of fairness and the proper role of racial categories in government action. Now two contemporary philosophers, in a lively debate, lay out the arguments on each side. Carl Cohen, a key figure in the University of Michigan Supreme Court cases, argues that racial preferences are morally wrong--forbidden by the 14th Amendment to the Constitution, and explicitly banned by the Civil Rights Act of 1964. He also (...) contends that such preferences harm society in general, damage the universities that use them, and undermine the minorities they were intended to serve. James P. Sterba counters that, far from being banned by the Constitution and the civil rights acts, affirmative action is actually mandated by law in the pursuit of a society that is racially and sexually just. The same Congress that adopted the 14th Amendment, he notes, passed race-specific laws that extended aid to blacks. Indeed, there are various kinds of affirmative action--compensation for past discrimination, remedial measures aimed at current discrimination, the guarantee of diversity--and Sterba reviews the Supreme Court cases that build a constitutional foundation for each. Affirmative action, he argues, favors qualified minority candidates, not unqualified ones. Both authors offer concluding comment on the University of Michigan cases decided in 2003. Half a century after Brown v. Board of Education, issues pertaining to racial discrimination continue to grip American society. Ideal for courses in political, social, ethical, and legal philosophy, this penetrating debate explores the philosophical and legal arguments on all sides of affirmative action, but also reveals the passions that drive the issue to the forefront of public life. (shrink)

Research on social transmission suggests that people preferentially transmit information about threats and social interactions. Such biases might be driven by the arousal that is experienced as part of the emotional response triggered by information about threats or social relationships. The current studies tested whether preferences for transmitting threat-relevant information are consistent with a functional motive to recruit social support. USA residents were recruited for six online studies. Studies 1a and 1B showed that participants more often chose to transmit positive, (...) low-arousal vignettes. Studies 2A and 2B showed higher intentions to transmit emotional vignettes to friends. Study 4 showed a preference for transmitting stories that participants had modified and were therefore novel and unique. Studies 2A and 3 suggest that motivations for seeking social support might influence transmission preferences. Overall, the findings are not easily accounted for by any of the major theories of social transmission. We discuss limitations of the current studies and directions for further research. (shrink)

The finding that women are attracted to men older than themselves whereas men are attracted to relatively younger women has been explained by social psychologists in terms of economic exchange rooted in traditional sex-role norms. An alternative evolutionary model suggests that males and females follow different reproductive strategies, and predicts a more complex relationship between gender and age preferences. In particular, males' preferences for relatively younger females should be minimal during early mating years, but should become more pronounced as the (...) male gets older. Young females are expected to prefer somewhat older males during their early years and to change less as they age. We briefly review relevant theory and present results of six studies testing this prediction. Study 1 finds support for this gender-differentiated prediction in age preferences expressed in personal advertisements. Study 2 supports the prediction with marriage statistics from two U.S. cities. Study 3 examines the cross-generational robustness of the phenomenon, and finds the same pattern in marriage statistics from 1923. Study 4 replicates Study 1 using matrimonial advertisements from two European countries, and from India. Study 5 finds a consistent pattern in marriages recorded from 1913 through 1939 on a small island in the Philippines. Study 6 reveals the same pattern in singles advertisements placed by financially successful American women and men. We consider the limitations of previous normative and evolutionary explanations of age preferences and discuss the advantages of expanding previous models to include the life history perspective. (shrink)

Using the Implicit Association Test, recent experiments have demonstrated a strong and automatic positive evaluation of White Americans and a relatively negative evaluation of African Americans. Interpretations of this finding as revealing pro-White attitudes rest critically on tests of alternative interpretations, the most obvious one being perceivers’ greater familiarity with stimuli representing White Americans. The reported experiment demonstrated that positive attributes were more strongly associated with White than Black Americans even when pictures of equally unfamiliar Black and White individuals were (...) used as stimuli and differences in stimulus familiarity were statistically controlled. This experiment indicates that automatic race associations captured by the IAT are not compromised by stimulus familiarity, which in turn strengthens the conclusion that the IAT measures automatic evaluative associations. © 2000 Academic Press. (shrink)

The theory of revealed preference, which lies at the core of the neoclassical economic method, asserts that people's preference orderings are revealed by their actions. This assertion has two possible meanings, of which one is a truism and the other false. When a person joins a riot against the government, he reveals through this action that he would rather riot than not. This is the sense in which the assertion is a truism. But if one means (...) that the person must want a change of government, this is certainly false. His decision to riot could mean only that he considers it dangerous to stay on the sidelines. (shrink)

In his famous lecture on ‘The Concept of Preference’ Amartya Sen (1982) opened up the topic of preference and preference-satisfaction to critical, philosophical debate. He pointed out that preference in the sense in which choice reveals one’s preference need not be preference in the sense in which people are personally better off for having their preferences satisfied. And on the basis of that observation he built a powerful critique of some common assumptions in welfare (...) economics. (shrink)

This study examined the association between mental rotation ability and facial masculinity preference in gay and bisexual men in China. The participants (436 gay/bisexual men, 132 heterosexual men and 254 heterosexual women) completed an online Shepard and Metzler-type mental rotation task and a forced-choice preference task of ten pairs of masculinized/feminized male faces. The results revealed that mental rotation ability was significantly associated with preference for masculinized faces in both gay and bisexual men. There were no (...) significant correlations between mental rotation ability and facial masculinity preference in both heterosexual men and women. The findings imply homogamy in partner preference in gay and bisexual men in terms of masculinity. (shrink)

While very much in Sen's camp in rejecting revealed preference theory and emphasizing the complexity, incompleteness, and context dependence of preference and the intellectual costs of supposing that all the factors influencing choice can be captured by a single notion of preference, this essay contests his view that economists should recognize multiple notions of preference. It argues that Sen's concerns are better served by embracing a single conception of preference and insisting on the need (...) for analysis of the multiple factors that determine ‘preference’ so conceived. (shrink)

This paper examines the preference-based approach to the identification of beliefs. It focuses on the main problem to which this approach is exposed, namely that of state-dependent utility. First, the problem is illustrated in full detail. Four types of state-dependent utility issues are distinguished. Second, a comprehensive strategy for identifying beliefs under state-dependent utility is presented and discussed. For the problem to be solved following this strategy, however, preferences need to extend beyond choices. We claim that this a necessary (...) feature of any complete solution to the problem of state-dependent utility. We also argue that this is the main conceptual lesson to draw from it. We show that this lesson is of interest to both economists and philosophers. (shrink)

The note puts forward the idea of revealed desirability, a novel instrument, which like revealed preference is observable from choice and important for individual and social welfare. We provide the axiomatic underlying individual’s choice model, preliminary experimental results that support the idea, and an appealing allocation rule that uses the revealed desirability information along with the revealed-preference information.

Background: Current practice frequently fails to provide care consistent with the preferences of decisionally-incapacitated patients. It also imposes significant emotional burden on their surrogates. Algorithmic-based patient preference predictors (PPPs) have been proposed as a possible way to address these two concerns. While previous research found that patients strongly support the use of PPPs, the views of surrogates are unknown. The present study thus assessed the views of experienced surrogates regarding the possible use of PPPs as a means to help (...) make treatment decisions for decisionally-incapacitated patients. -/- Methods: This qualitative study used semi-structured interviews to determine the views of experienced surrogates [n=26] who were identified from two academic medical centers and two community hospitals. The primary outcomes were respondents’ overall level of support for the idea of using PPPs and the themes related to their views on how a PPP should be used, if at all, in practice. -/- Results: Overall, 21 participants supported the idea of using PPPs. The remaining five indicated that they would not use a PPP because they made decisions based on the patient’s best interests, not based on substituted judgment. Major themes which emerged were that surrogates, not the patient’s preferences, should determine how treatment decisions are made, and concern that PPPs might be used to deny expensive care or be biased against minority groups. -/- Conclusions: Surrogates, like patients, strongly support the idea of using PPPs to help make treatment decisions for decisionally-incapacitated patients. These findings provide support for developing a PPP and assessing it in practice. At the same time, patients and surrogates disagree over whose preferences should determine how treatment decisions are made, including whether to use a PPP. These findings reveal a fundamental disagreement regarding the guiding principles for surrogate decision-making. Future research is needed to assess this disagreement and consider ways to address it. (shrink)

Are risk preferences stable over time? To address this question we elicit risk preferences from the same pool of subjects at two different moments in time. To interpret the results, we use a Fechner stochastic choice model in which the revealed preference of individuals is governed by some underlying preference, together with a random error. We take cumulative prospect theory as the underlying preference model (Kahneman and Tversky, Econometrica 47:263–292, 1979; Tversky and Kahneman, Journal of Risk (...) and Uncertainty 5:297–323, 1992). We observe that the aggregate pattern of preferences is very similar in both sessions, and it matches the results reported in the literature. Most subjects are risk averse for gains, and risk seeking for losses. However, the subjects that jointly agree with the reflection effect of prospect theory are around 50%. The percentage of individuals that change their responses across sessions is quite high, 63%. Estimating the stochastic choice model we find that 72% of the subjects have an underlying preference which agrees with the reflection effect of prospect theory. The remaining 28% are mainly classified as risk averse for both gains and losses. The results reinforce the empirical validity of the reflection effect. Deviations from the reflection effect can be attributed to noise, as well as to the existence of a fraction of risk averse subjects. (shrink)

Using the Implicit Association Test (IAT), recent experiments have demonstrated a strong and automatic positive evaluation of White Americans and a relatively negative evaluation of African Americans. Interpretations of this finding as revealing pro-White attitudes rest critically on tests of alternative interpretations, the most obvious one being perceivers’ greater familiarity with stimuli representing White Americans. The reported experiment demonstrated that positive attributes were more strongly associated with White than Black Americans even when (a) pictures of equally unfamiliar Black and White (...) individuals were used as stimuli and (b) differences in stimulus familiarity were statistically controlled. This experiment indicates that automatic race associations captured by the IAT are not compromised by stimulus familiarity, which in turn strengthens the conclusion that the IAT measures automatic evaluative associations. © 2000 Academic Press.. (shrink)

Quality Adjusted Life Years (QALYs) have become a household word among health economists. Their use as a means of comparing the value of health programmes and medical interventions has stirred up controversy in the medical profession and the academic community. In this paper, I argue that QALY analysis does not adequately take into account the differentiated nature of the health state values it measures. Specifically, it does not distinguish between needs and preferences with respect to its valuation of health states. (...) I defend the view that needs and preferences are clearly distinguishable, and that the concept of needs cannot be dispensed with, as many health economists suggest. It is argued that the scale along which health states are measured in QALY analysis is not a continuous interval scale, but one which concerns two distinctly different value dimensions. Measuring the values of health state intervals may reveal the weighting attached to the different value dimensions. (shrink)

This paper addresses the phenomenon of incomplete preferences in disaster risk management. If an agent finds two options to be incomparable and thus has an incomplete preference ordering, i.e., neither prefers one option over the other nor finds them equally as good, it is not possible for the agent to perform a value tradeoff, necessary for an informed decision, between these two options. In this paper we suggest a way to model incomplete preference orderings by means of probabilistic (...) preferences, and how to reveal an agent’s incomplete preference ordering within a behaviorist framework. (shrink)

As the market share of Fair Trade food products in countries of the North grows, understanding consumer preferences with regard to this recent label is becoming increasingly important. This article reports on a test of the consistency of consumers' stated preferences, for which a survey was conducted at the place and time of actual purchase decisions. The aim of the survey was to further improve the understanding of consumers' stated motivations for buying 'Fair Trade' and 'organic Fair Trade' bananas in (...) Switzerland. Hypothetical questions with double dichotomous choices were used to compare two types of bananas - conventional and labelled - and to assess the average stated willingness-to-pay (WTP) for Fair Trade-labelled bananas. The results show that Fair Trade is largely accepted in Switzerland and that the premium for purchasing such products is influenced by age, the number of young children and the perception of the Fair Trade label. I then used a comparative test of field observations and stated preferences for bananas to measure inconsistency in choices. This comparison reveals that less than one-fifth of the answers are in principle inconsistent. These results point to the importance of confidence in the Fair Trade labels if consumers' purchases are to increase. (shrink)