Indifference in economics: Between praxeology and the neoclassical presentation of a consumer’s choice

Abstract

Objective: The objective of the article is to present the differences in the research approach concerning consumer behaviour from the perspective of neoclassical economics and the Austrian school of economics. Research Design & Methods: The article applies the qualitative approach based on comparative analysis of the subject literature. While selecting research material, the author considered major works presenting the neoclassical theory of a consumer’s choice as well as those representing the Austrian school, criticizing neoclassical views. Findings: The article explains the methodological approaches leading to alternative interpretations of indifference in neoclassical economics and the Austrian school. Implications & Recommendations: Indifference constitutes the key category that enables readers to understand positions adopted by neoclassical economists and representatives of the Austrian school of economics. The conducted analysis implies that different understanding of indifference constitutes the main source of the dispute regarding the theories of a consumer’s behaviour in the analyzed concepts. Contribution & Value Added: The value added of this article lies in showing the causes of divergence between the theory of a consumer’s choice developed in neoclassical economics and its criticism expressed by representatives of the Austrian school of economics.

Keywords

• indifference analysis
• praxeology
• neoclassical economics
• Austrian school of economics
• methodology of economics