From: Arrow Kenneth J. [mailto:[email protected]]
Sent: Thursday, August 28, 2014 6:21 AM
To: Vice Chancellor Office PIDE
Subject: Re: Survey of the massive amount of empirical evidence
Dear Dr. Zaman:
Thank you for the very complete and well-argued critique of the utility-maximization theory.
Of course, the remaining question is, what should take the place of that theory?
Yours truly
Kenneth J. Arrow
http://ssrn.com/abstract=2033641
Consumer, now-a-days, purchases/consumes goods and services on the basis of need-satisfaction, for instance, consumption of petrol does not look at price and utility balance but on its need for various uses. Similarly, we purchase books or food not by balancing price and total utility but on the basis of need satisfaction. Need-satisfaction is different from total/marginal utility. The changes of time and the context have changed the consumers' behaviour. Need-Satisfaction is best replacement of 'Total Utility Theory'
This is what should replace it:
https://www.researchgate.net/publication/270687116_AXIOMATIC_THEORY_of_ECONOMICS
Book AXIOMATIC THEORY of ECONOMICS
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