Samuelson’s Revealed Preference Theory

Samuelson’s Revealed Preference Theory is an economic principle that suggests we can understand a person's preferences based on their choices, rather than what they say they like. If a person chooses one product over another when both are available, it reveals a preference for the chosen item. Essentially, actions reveal true preferences. This theory helps economists analyze consumer behavior by observing decisions rather than relying solely on stated desires or intentions. It implies that consistent choices over time can provide insights into a person's true tastes and priorities in consumption.