Thursday, May 13, 2010

Revealed preference

To an economist, talk is cheap and actions tell you what people really think.  For example, why would Vice President Al Gore buy a coastal mansion in California, less than 50' above sea level if, as his award-winning movie warns, he expects rising sea levels to flood coastal areas?
.. the only explanation I can think of is that Mr. Gore ... does not actually believe his predictions of doom...

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