# Questions tagged [preferences]

Binary relations that reflect which states of the world an agent considers to be most desirable. Preferences are a fundamental ingredient in the axiomatic study of consumer choice decision theory.

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### Cost, disutility and loss aversion applied to a queuing system

I am currently working with a queueing system where customers enter a system and are served. Service takes a random amount of time $\Delta t \sim F(\cdot)$ where $F:\mathbb{R}\to[0,1]$ is a cumulative ...
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### On risk aversion and validity of utility functions

Question A risk-averse, non-satiated investor has decided to use the utility function $$U(w) = w + dw^2,$$ where $$d \leq 0$$ is a constant, to describe his preferences. The investor has a current ...
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Question A risk-averse, non-satiated investor has decided to use the utility function $$U(w) = w + dw^2,$$ where $$d \leq 0$$ is a constant, to describe his preferences. Derive an upper bound for $w$, ...
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### A preference relation is continuous if and if there exists a utility function that represents it

Suppose that $X \subset \mathbb{R}^n$. A preference relation $\preceq$ is reflexive, complete, transitive and continuous if and only if there exists a utility function $u:X \rightarrow \mathbb{R}$ ...
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### strict monotonicity definition in Reny textbook and strong monotonicity

Reny-advanced microeconomic theory-page 10 wiki-monotonicity preference This capture is the definition of strict monotonicity in Reny's textbook, and I've compare it with wikipedia also other ...
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### In Austrian economics, do producers have an ordering of preferences similar to consumers?

I watched a video from the Mises Institute where the lecturer mentioned that in Austrian economics, the consumer behavior that is observed is a result of their perception of the utility of the ...
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### Indifference curve - corner point - Q about notation

I wonder if someone can help me interpret the vertical bar notation used in the picture. From the graph, it is apparent that the consumer will consume only good $x_1$, since the indifference curve is ...
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### Is it possible to have mean-variance preferences with different states of nature? Mean-Variance and Expected utility together?

I have to maximize mean-variance preferences like this (where Pi is a profit function): \begin{align} \label{eq:9} \max\limits_{Q_{F}^{\{x\}}}Z_{w}= E[\pi{\{x\}}]-\frac{A}{2}Var[\pi{\{x\}}] \nonumber\\...
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### Does x ≽ y imply x > y or x ~ y in preferences?

Mas Collel Micro Theory question: Suppose that X is a set. Let ≽ be a binary preference on X. And ~ represents indifference defined from ≽. If ≽ satisfy completeness, is it okay to assume that: x ≽ y ...
1 vote
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### In a setting with N goods how many combinatorial bits do we need to construct a preference map

I am reading this paper: https://www.researchgate.net/publication/5208445_The_market_for_preferences By P.E Earl and J.Potts On page 3 the following is written: "If we think of individual ...
1 vote
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### Proving properties for preferences?

I have a midterm coming up and I am still not entirely sure on the formal arguments for proving (strict)\convexity, monotonicity, continuity, quasi-concavity e.t.c. I think I have a pretty strong ...
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### Violation of Monotonicity of preferences

Hi I am reading Jehle and Reny in my master's course and I have come across a problem in one of the exercises. My instructor herself was a bit confused when a student gave her a counter-example and ...
1 vote
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Han et. al.,2021 mentioned that So in contrast with traditional behavioral finance models, active strategies tend to spread through the population even if investors have no inherent preference for ...