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Continue from this question, the book Microeconomic Theory by Mas-Colell et al. said

We now take $\alpha(x)$ as our utility function; that is, we assign a utility value $u(x)=\alpha(x)$ to every $x$. This utility level is also depicted in Figure 3.C.1. We need to check two properties of this function: that it represents the preference $\succsim$ (i.e., that $\alpha(x)\geq\alpha(y)$ if and only if $x\succsim y$) and that it is a continuous function.

That $\alpha(x)$ represents preferences follows from its construction. Formally, suppose first that $\alpha(x)\geq\alpha(y)$. By monotonicity, this implies that $\mathbf{\alpha(x)e\succsim\alpha(y)e}$. Since $x\sim\alpha(x)e$ and $y\sim\alpha(y)e$, we have $x\succsim y$. Suppose, on the other hand, that $x\succsim y$. Then $\alpha(x)e\sim x\succsim y\sim\alpha(y)e$; and so by monotonicity, we must have $\mathbf{\alpha(x)\geq\alpha(y)}$. Hence, $\alpha(x)\geq\alpha(y)\iff x\succsim y$.

I have two questions about this second paragraph (as highlighted in bold).

  1. I don't think monotonicity is sufficient to draw the conclusion. We also need continuity, right? See this post and this post for a related issue as well as the following lemma:

Lemma$\quad$ For a monotone, continuous, and rational preference relation $\succsim$ on $X=\mathbb{R}^L_+$, $y\geq x$ implies $y\succsim x$.

  1. "...by monotonicity, we must have $\mathbf{\alpha(x)\geq\alpha(y)}$." Does this follow from the contrapositive of the definition of monotonicity?

Definition$\quad$ The preference relation $\succsim$ on $X$ is monotone if $x\in X$ and $y\gg x$ implies $y\succ x$.

of which the contrapositive is

The preference relation $\succsim$ on $X$ is monotone if $x\succsim y$ implies $x\geq y$.


Reference Microeconomic Theory by Andreu Mas-Colell, Michael D. Whinston, and Jerry R. Green.

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    $\begingroup$ Could you include an explicit reference to the book (authors and title) by editing your post? $\endgroup$ Commented May 13 at 6:53
  • $\begingroup$ @RichardHardy Yes, I added a reference. $\endgroup$
    – Champa
    Commented May 13 at 12:58
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    $\begingroup$ Your contrapositive is not correct. It can be the case that neither $y\gg x$ nor $x\geq y$ holds. For example, if $y=(0,1)$ and $x=(0,0)$. $\endgroup$ Commented May 13 at 13:29
  • $\begingroup$ @MichaelGreinecker So do we need to prove it by contradiction: Assume to the contrary that $\alpha(y)>\alpha(x)$. Then $\alpha(y)e\gg\alpha(x)e$ and so $y\sim\alpha(y)e\succ\alpha(x)e\sim x$, a contradiction. $\endgroup$
    – Champa
    Commented May 13 at 14:21
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    $\begingroup$ Yes, that should work. $\endgroup$ Commented May 13 at 17:13

1 Answer 1

2
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Def 3.B.2: The preference relation $\succsim$ on $X$ is monotone if $x\in X$ and $y\gg x$ implies $y\succ x$.

[1] If $\alpha(x)\geq \alpha(y)$, then there are two possibilities:

(i) $\alpha(x)>\alpha(y)$. In this case, $\alpha(x)e=(\alpha(x),\alpha(x),\ldots,\alpha(x))\gg (\alpha(y),\alpha(y),\ldots,\alpha(y))=\alpha(y)e$. So, by monotonicity, $\alpha(x)e\succ\alpha(y)e$. Therefore, $\alpha(x)e\succsim\alpha(y)e$.

(ii) $\alpha(x)=\alpha(y)$. In this case, $\alpha(x)e=(\alpha(x),\alpha(x),\ldots,\alpha(x))= (\alpha(y),\alpha(y),\ldots,\alpha(y))=\alpha(y)e$. So by completeness (reflexivity), $\alpha(x)e\succsim\alpha(y)e$

So, we don't need continuity to show that if $\alpha(x)\geq \alpha(y)$ holds then $\alpha(x)e\succsim\alpha(y)e$.

[2] If $\alpha(x)e\succsim \alpha(y)e$, then either $\alpha(x) > \alpha(y)$ or $\alpha(x) = \alpha(y)$. This is because if that is not the case and we have $\alpha(x) < \alpha(y)$ for some $x,y$, then by monotonicity, $\alpha(y)e\succ\alpha(x)e$, contradicting $\alpha(x)e\succsim \alpha(y)e$.

Contrapositive of monotonicity: The preference relation $\succsim$ on $X$ is monotone if $x\succsim y$ then either $x\notin X$ or $\neg y\gg x$.

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  • $\begingroup$ Thanks a lot! About question 1, I forgot that $\alpha(\cdot)\in\mathbb{R}_+$ instead of $\mathbb{R}^L_+$. $\endgroup$
    – Champa
    Commented May 13 at 17:19
  • $\begingroup$ (Please correct me if I'm wrong.) After a second thought, I think your (ii) for question [1] depend on the lemma from the original question, and thus continuity. Completeness doesn't say anything about $\gg$ or $\leq$ relations. $\endgroup$
    – Champa
    Commented May 13 at 21:47
  • $\begingroup$ It follows from completeness of $\succsim$ that $\succsim$ is reflexive, and therefore, $\forall x\in X$, $x\succsim x$ holds. Since $\alpha(x)=\alpha(y)$ implies that $\alpha(x)e=\alpha(y)e$ (i.e. both are the same bundle), so by reflexivity, $\alpha(x)e\succsim \alpha(x)e$ which is just another way of writing $\alpha(x)e\succsim \alpha(y)e$ $\endgroup$
    – Amit
    Commented May 14 at 3:48

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