GARP (Generalized Axiom of Revealed Preference)

The Generalized Axiom of Revealed Preference (GARP) is a concept in economics that helps determine if a consumer's choices are consistent with rational behavior. It looks at a series of decisions, such as what items they buy at different prices, to see if their choices could logically happen if they were trying to maximize their satisfaction within their budget. If their choices violate GARP, it suggests inconsistency or irrationality in their preferences. Essentially, GARP tests whether observed buying patterns make sense logically, ensuring that preferences are coherent and consistent over time.