Extrinsic Value

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The theory of extrinsic value, also called the subjective theory of value, is a theory which advances the idea that the value of a good is determined by the importance an acting individual places on a good for the achievement of his or her desired ends, what is called utility. The theory of extrinsic value posits that value cannot be measured or observed directly. So instead, economists devised a way to infer underlying relative utilities from observed choice, called ‘revealed preferences.’

2016-10-15T10:27:26+00:00