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30 sats \ 3 replies \ @Rothbardian_fanatic OP 3 Apr \ parent \ on: What Economists Do and Why They Do It science
I just wonder where they are coming up with preferential assumptions, is it from interviews, questionnaires or from actual observations of real purchases? They would all be erroneous if they are used as assumptions because none of them show real preferences for the next choice, and that includes purchase observations due to diminishing returns factor changing preferences. So, wouldn’t the starting assumptions always be incorrect?
No, there are very weak assumptions made about the properties of preferences and then they just do the work in abstract to arrive at the functional form of the solution.
From there you can evaluate how different parameter values change the solution.
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I would say that they are weak. Assumptions of a steady state always seem to be weak, to me. Marginalism and Subjectivism seem to dictate that situation.
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Modern micro is also founded on Marginal and Subjective Utility. The assumptions made about preferences are "Rationality Assumptions" that are only slightly stronger than what the Austrians also assume.
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