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Weak axiom of revealed preference |
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Weak axiom of revealed preferenceThe assumption that a consumer who reveals strict preference for one bundle of goods over another will not, in other circumstances, reveal their preference for the second over the first. That is, if qi, qj are the vectors of goods purchased at prices pi, pj respectively, then piqi>piqj Þ pjqi>pjqj. Used in proving correlation results.Similar MatchesPreferencesPreferences1. In trade policy, this refers to special advantages, such as lower-than-MFN tariffs, accorded to another country's exports, usually in order to promote that country's development. See GSP. 2. In trade theory, this refers to the attitudes of consumers toward different goods, as represented by a utility function. Some propositions in trade theory use the assumption of identical and/or homothetic preferences. Tariff preferenceTariff preferenceA lower (or zero) tariff on a product from one country than is applied to imports from most countries. This violation of the MFN principle is permitted in special cases, including some preferential trade arrangements and the GSP. Stepped preference sharesStepped preference sharesPreference shares with dividends which increase annually by a specified amount and with a predetermined capital return. Preference stockPreference stockA security that ranks junior to preferred stock but senior to common stock in the right to receive payments from the firm; essentially junior preferred stock. Revealed preferenceRevealed preferenceThe use of the value of expenditure to "reveal" the preference of a consumer or group of consumers for the bundle of goods they purchase compared to other bundles of equal or smaller value. Used by Samuelson (1939) and Ohyama (1972), especially, to examine the gains from trade. Further SuggestionsGeneralized System of PreferencesPreference for variety Community preferences Identical preferences cumulative preference shares preference shares Loan Preference Principle Preference share participating preference shares Homothetic preferences redeemable preference shares Liquidity preference hypothesis Tax preference item Involuntary liquidation preference |
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