Tuesday, January 03, 2012

Revealed Preference Revisited: David Beckham Prefers LA to Paris

From observing his locational choice and his budget constraints, we learn that Bend It Beckham must prefer LA to Paris. Why?  A Paris team offered him twice the $ to leave LA and he rejected it.  Now, I'm assuming that his endorsements compensation doesn't depend on where he plays.   But, under this assumption, Beckham is acting in accord with the logic of my classic 1995 JUE paper.