Realism, Commonsensibles, and Economics: The Case of Contemporary Revealed Preference Theory

Abstract

Uskali Maki has long argued that realist interpretations of economics do not face a challenge regarding the ontological status of non-observable theoretical entities. He argues that in economics, unlike physics, the theoretical entities are – entities familiar from our common sense everyday life – and are thus unproblematic. This paper challenges Maki's commonsensibles argument by offering a case study from contemporary revealed preference theory (CPRT) where terms like preference, and to some extent choice, are radical departures from the common sense meanings of these terms. The paper argues that even though the terms used in CRPT depart from our common sense notions of preference and utility, this fact actually provides support for Maki's broader thesis regarding the importance of realism in economics.