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Plausible reasoning can be used to fill in implicit premises in incomplete arguments. Plausible reasoning is commonly based on appearances from perception. Stability is an important characteristic of plausible reasoning. Plausible reasoning can be tested, and by this means, confirmed or refuted.
An example in economic policy, economist Anthony Downs concluded that a high income voter ‘votes for whatever party he believes would provide him with the highest utility income from government action’, [19] using rational choice theory to explain people's income as their justification for their preferred tax rate.
For example, a tsunami could also explain why the streets are wet but this is usually not the best explanation. As a form of non-deductive reasoning, abduction does not guarantee the truth of the conclusion even if the premises are true. [80] [82] The more plausible the explanation is, the stronger it is supported by the premises.
In welfare economics, the theory of the second best concerns the situation when one or more optimality conditions cannot be satisfied. [1] The economists Richard Lipsey and Kelvin Lancaster showed in 1956 that if one optimality condition in an economic model cannot be satisfied, it is possible that the next-best solution involves changing other variables away from the values that would ...
Because of this example, some authors credit Condorcet with having given an intuitive argument that presents the core of Arrow's theorem. [20] However, Arrow's theorem is substantially more general; it applies to methods of making decisions other than one-man-one-vote elections, such as markets or weighted voting, based on ranked ballots.
Also called resource cost advantage. The ability of a party (whether an individual, firm, or country) to produce a greater quantity of a good, product, or service than competitors using the same amount of resources. absorption The total demand for all final marketed goods and services by all economic agents resident in an economy, regardless of the origin of the goods and services themselves ...
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Explanatory power is the ability of a hypothesis or theory to explain the subject matter effectively to which it pertains. Its opposite is explanatory impotence.. In the past, various criteria or measures for explanatory power have been proposed.