Saturday, November 07, 2009
Here's something interesting. Maybe not to most of you, but at least to me.
Demand is a persons willingness to pay for a given good. And in economics, we would love to know people's willingness to pay so that then we can form a demand curve that maps reality as close as possible. But we've come to respect that people's willingness to pay is probably something that we'll never truly find because no one would reveal their true willingness to pay, and even if they did, how would you know? So economists have nicely coined it as private information, private only to the buyer.
But what if the buyer doesn't know their true willingness to pay?
Dan
11:40 am