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Wednesday, April 13, 2011

Dollar voting

From Wikipedia, the free encyclopedia

In economics, dollar voting is an analogy used to explain how the purchasing choices of consumers affect which products will continue to be produced and supplied to the market. Every dollar paid for a particular product may be considered a "dollar vote" for that product, such that the products with the largest number of dollar votes generate the most profit and will therefore continue to be produced. A boycott would be a vote against a product.

The reference to "dollar" is just an example; the principle holds for any currency. The expressions "vote with your wallet" and "vote with your dollar" refer to dollar voting.

Dollar voting is similar in theory to Foot voting.

[edit] Criticism

Some economists, like Amartya Sen, have argued that dollar voting requires near perfect knowledge about any product that one wishes to buy. It is sometimes impossible to know whether a product was made by child labour, for example.

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