POLITICS AND PREFERENCESTweet
In 1938, Paul Samuelson first laid the foundations of the Generalised Theory of Revealed Preference. Over the decades, several economists have added to the body of literature building on the hypothesis which broadly follows: people’s purchases or spending patterns are the best metric to gauge consumer preferences.
This theory is based on the very basic premise that before making a particular purchasing decision, consumers would have weighed the gains and losses from a set of alternatives.
In other words, the shopper has eventually revealed her preference in favour of one unambiguous option from a set of choices.
For instance, if you are reading this, you have revealed your preference for this column over a basket of millions of alternatives freely available across the World Wide Web.
Likewise, if you buy only one brand of shaving blades, almost axiomatically, you have revealed your preferences for shaving implements. This is of vital importance not only to brand’s producer, but also to its competitors as well.
Until the Internet’s arrival, companies almost entirely depended on physical polling to get an idea about consumer behaviour, to fit trends and seek patterns in purchases. Online interactivity, however, has allowed a multi-directional approach in people’s efforts to read the human mind.
There is no gainsaying the fact that the human mind, till date, remains the insurmountable final frontier for the modern era’s two foremost strands of thought: economics and politics.
Hardly surprising, then, the twenty-first century’s most booming companies—Google, Facebook, Twitter, Apple, Samsung—have become successful because these have conquered new peaks in man’s unending endeavour to get a peek into the human mind.
In more ways than one, these companies, and their accomplishments, mirror a continuum of efforts that ancient and medieval philosophers have been trying for millennia. Epistemology—or the study of human comprehension—remains as fertile an area of research today as it was centuries ago.
In the current context, particularly for India, it would be interesting to situate the voter as the consumer in the Samuelson’s axiom of revealed preference. The Aam Admi Party (AAP)—a start- up rivals and pundits had dismissed as an upstart not worth their while spending time on—has demonstrated that the voter’s preference may be very different from mainstream forecasts.
Conventional thinking would suggest that the size of turnouts at election rallies can be taken as a guide to the direction political winds may be blowing. High attendance at election meetings should normally imply that people would record their preference for the party for whose meetings they had flocked to in large numbers.
The AAP’s emergence, however, has shown this line of thinking can sometimes be fallacious.
Little wonder, then, that as political parties take mark ahead of the home run of the 2014 Lok Sabha elections, they are expending so much time and energy on social media to peer into the voter’s mind; for nobody’s sure where her preferences lie. So far, results of all such efforts have, at best, been sub-optimal.
SUB-OPTIMAL takes a look at the reciprocity between economics, politics, culture and society.