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).
- 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 $y\succsim x$.
- "...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.