Scitovsky Theorem

Scitovsky's Theorem addresses consumer behavior, stating that a consumer's choice depends not only on their preferences but also on how their choices are influenced by previous experiences and the context of options available. It emphasizes that consumers are sensitive to both the satisfaction they expect from a product and their previous consumption, which can affect their current preferences. In simpler terms, our choices are shaped both by what we want and how our past and current options influence our feelings, making decision-making a dynamic process rather than just a straightforward ranking of preferences.