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.

Filter by
Sorted by
Tagged with
3 votes
1 answer
26 views

In revealed preference (RP), is any two points $x,y$ related by the indirect revealed preference relation?

Let $X$ be the closed compact convex set of alternative and $B$ be a closed compact convex subset of $X$. $C$ is defined on all closed compact convex set $B\subseteq X$. $X$ is ordered by a strictly ...
High GPA's user avatar
  • 1,866
0 votes
1 answer
77 views

Why is monotonic preference and monotonic utility function non-decreasing?

Obviously a monotonic function can be either nondecreasing or nonincreasing: However, in Economics, a quick google search gives: I am interested in the history or the motivation behind the econ ...
dodo's user avatar
  • 259
1 vote
0 answers
8 views

What was the study that shows peoples' tax preferences shift when they get more information about their income?

I am trying to find a study I read a few years ago, but I forgot the names of the authors and the title of the study. I have already tried to search for the study on Google Scholar without much luck. ...
csilvia's user avatar
  • 2,673
0 votes
0 answers
37 views

Example to Demonstrate that with Uncountably Infinite Outcomes We do not Have A Representing Utility Function [duplicate]

Suppose we define $\Omega$ = $\mathbb R_+$. The preference relation $\succeq $ is defined as $$(x_1, x_2)\succeq(y_1,y_2)\iff x_1>y_1 \text{ or } [x_1=y_1 \text{ and }x_2\geq y_2]$$ where $x_1, x_2,...
Luka's user avatar
  • 1
0 votes
1 answer
104 views

Determine Whether A Preference Relation Satisfies The Continuity Axiom - from Exercise 1.1 in Game Theory: Analysis of Conflict by Roger Myerson

I am self-studying game theory using Game Theory: Analysis of Conflict by Roger Myerson. Here is an exercise from the textbook. I tried it myself, but I am not sure if it is correct. I would really ...
Beerus's user avatar
  • 251
1 vote
1 answer
83 views

y is weakly preferred over x if and only if x+y ≤ 4 defines a preference relation on {0,1,2,3} why is this incomplete?

y is weakly preferred over x if and only if x+y ≤ 4 defines a preference relation on {0,1,2,3}. True or False?. I can see why it's not transitive but I was told it was incomplete if we take 2 and 3. ...
Froter's user avatar
  • 31
2 votes
1 answer
95 views

Transitivity of Preferences paper

I am going through some of my old grad school notes, and in my microeconomics notes on transitive preferences, the teacher made a note of a behavioral economics result where when presented with two ...
Kitsune Cavalry's user avatar
  • 6,578
1 vote
1 answer
44 views

Give bundles $x,y\in \mathbb R^n$, there must exist a budget $B\supset\{x,y\}$ and a demand $D(B)\in[x,y]$?

For a problem in revealed preference. Give bundles $x,y\in \mathbb R^n$, must there exist a budget $B\supset\{x,y\}$ and a demand $D(B)\in[x,y]$? Intuitively, this mean that we have two bundles, and ...
dodo's user avatar
  • 259
2 votes
2 answers
231 views

Lexicographic preference relation not continuous

I’m having trouble understanding why lexicographic preference relations aren’t continuous. I need inspiration on how this proof would work.
GraceLynn87's user avatar
0 votes
0 answers
37 views

Properties of Consumer Preferences - Monotonicity

Was reviewing topics and I came across this question. I am confused because there is no reference to strict or weak monotonicity in this case. I first thought that monotonicity is violated b/c an ...
Sperbs's user avatar
  • 1
0 votes
1 answer
259 views

Quasiconvex and quasiconcave utility function

I saw that the model of the quasi-convex utility function is similar to the concave utility function and also the quasi-concave utility function is similar to the convex utility function. How can ...
Huy Lê Thanh's user avatar
0 votes
0 answers
29 views

Convexity preferences

What is the difference between convexity and strict convexity preferences? What is the difference between quasi-concavity and quasi-convexity? And is MRS still true in concave preferences?
Huy Lê Thanh's user avatar
3 votes
1 answer
100 views

Continuity of preference

"A preference is continuous if for any $a,b\in X$ with $a\succsim b$ there are some neighborhoods $N_{\varepsilon}(a)$, $N_{\delta}(b)$ around $a$ and $b$ such that for every $x \in N_{\...
Huy Lê Thanh's user avatar
3 votes
0 answers
100 views

Generalization of Debreu's additive utility function $\sum_nu_n(x_n)$ with infinite number of commodities

I want to generalize: $\sum_nu_n(x_n)$. Here $x_1,x_2,..,x_n,...$ are commodities. There are infinite number of commodities: $n\in\mathbb N$ or $n\in \mathbb R_+$ The following not a candidate: $\...
High GPA's user avatar
  • 1,866
1 vote
1 answer
42 views

Reference for monotonicity: $x\geq y\implies x\succsim y$ and $x>y\implies x\succ y$

I've seen this definition for monotonicity many times on different papers and on this site: $x\geq y\implies x\succsim y$ and $x>>y\implies x\succ y$. However, what I read on MWG's ...
High GPA's user avatar
  • 1,866
0 votes
0 answers
65 views

McKelvey-Schofield Chaos Theorem Without Agenda Setter

The McKelvey-Schofield Chaos Theorem states that in a multidimensional preference space, it is almost always possible to reverse engineer the implementation of your desired policy by constructing an ...
user10478's user avatar
  • 423
2 votes
2 answers
49 views

labor leisure model, quasilinear preferences

There is a quasilinear utility function $u= (1-t)wl - p(l)$, where $l$ is labor supply. I don't quite understand what happens, if the budget changes (due to $w$ or $t$) since it is quasilinear. Does ...
tk420's user avatar
  • 21
3 votes
1 answer
166 views

Sufficient conditions for connectedness of indifference sets of a preference relation defined on a compact and convex set only

Let $\succsim$ a complete, reflexive and transitive binary relation defined on $X$, a non-degenerated (i.e not identical to a singleton) convex compact subset of $\mathbb{R}^n_{++}$ (the set of n-...
Peter's user avatar
  • 33
4 votes
2 answers
159 views

Order relations and preferences using logic

I want to understand order relations using their underlying implication mechanics and what this means for certain results, specifically looking at preference relations. Using the logical rules of ...
CormJack's user avatar
  • 897
1 vote
0 answers
78 views

Is it possible to get back the consumer’s utility function from their demand functions?

I am curious about if it’s possible to reverse the utility maximization process, i.e. given the consumer’s Marshallian demand functions, find their utility function. I was thinking of trying to find ...
Nicolas Torres's user avatar
3 votes
1 answer
129 views

Preference relations based on Varian

I understand that there is no universally agreed terminology for preference relations. However I need to pin down a definitive way to think about them (both for my exam, and my own sanity). Please can ...
CormJack's user avatar
  • 897
0 votes
2 answers
82 views

Assigning dollar value to intangible costs and benefits

I am trying to develop a framework that a person can use to help them decide where to live. The idea is to assign a dollar value to various attributes (e.g. work opportunities, cost of living, climate,...
Kerrick Staley's user avatar
2 votes
1 answer
79 views

Conflicting Definitions of Weak Monotnocity (preferences)

Strong Montonicity my sources seem to agree on Strong monotonicity, i state equivalent definitions below. But weak montonicity i keep finding what appear to be conflicting definitions. In the ...
CormJack's user avatar
  • 897
2 votes
2 answers
120 views

Risk aversion and utility transformation: are preferences still the same?

If you have two utility functions $u(\cdot), \; v(\cdot)$ such that $v(x) = f(u(x))$ for some monotonic transformation $f(\cdot)$, then $u(\cdot)$ and $ v(\cdot)$ represent the same preference ...
Joao Francisco Cabral Perez's user avatar
2 votes
1 answer
106 views

Willingness to sell a lottery ticket vs. willingness to buy a lottery ticket

I'm struggling with this question: There is a lottery which gives you D with p = 0.25 and L with p = 0.75 while initial wealth is w (w > D > L > 0). What is the minimum price the person would ...
papagena's user avatar
2 votes
1 answer
61 views

Linear Engel Curve

How to prove that if the Engel curves (expenditures as a function of wealth) are linear in wealth, then the indirect utility function has the form $v_{i}(p,a_{i})=\alpha_{i}(p)+\beta(p)a_{i}$ for an ...
DRM's user avatar
  • 21
1 vote
0 answers
30 views

What is the difference between preferences of the producer vs the consumer?

The book I am working with (Rubinstein) states that in the case of the profit-maximizing producer, preferences are linear and the constraint is a convex set. Meanwhile, in the consumer model, ...
aliosha karamazov's user avatar
0 votes
0 answers
11 views

How to rationalize the following behaviors using preference relations?

The producer wishes to produce at least $y^*$ units. Once he has achieved that goal, he maximizes profit. The producer maximizes profit, but already employs $a^*_1$ workers and will incur a cost c (...
aliosha karamazov's user avatar
0 votes
0 answers
37 views

What are the conditions to determine whether demand function is rationalizable?

A consumer chooses a bundle (z, z, . . . , z) where z satisfies $z Σp_k = w$. The book (Rubinstein's) states that the demand function x(p,w) can be rationalized if there exists a preference such that ...
aliosha karamazov's user avatar
2 votes
2 answers
130 views

What does it mean if the derivative of the Utility function (at the optimal bundle) is 0?

It states in my book that under strict monotonocity, the derivative of U(x*)=0 can be possible although it's unlikely to happen. What does this exactly mean?
aliosha karamazov's user avatar
0 votes
0 answers
42 views

What does differentiability of Utility function at an optimal solution x* mean?

I am working with Rubinstein's book. It states there that if preferences are differentiable, then value per dollar at a bundle of a commodity is as large as value per dollar of the bundle of any other ...
aliosha karamazov's user avatar
1 vote
1 answer
77 views

Help with checking work for preferences over consumption and leisure question

I was wondering if anyone could help me check my work for the following question, and if I am wrong, help me correct my mistakes? Question: Work:
josephjones1472's user avatar
1 vote
1 answer
59 views

Are homothetic additively separable preferences always equivalent to CES?

Are homothetic additively separable preferences always a monotonic transformation of CES preferences? In technical language, the question is the following: Let $n>1$, and let $f:\mathbb{R}^n_{\ge 0}...
cfp's user avatar
  • 232
0 votes
1 answer
155 views

Can strict preference be represented by Utility function if not complete?

The definition states that a Utility function represents the preference relation because the relation on R satisfies transitivity and completeness. Yet, strict preferences (and indifference ...
aliosha karamazov's user avatar
2 votes
1 answer
147 views

Can a preference relation not satisfy monotonicity and still be represented by an Utility function?

The book I am working with (Microeconomics Theory by A. Rubinstein) states that: "In the case that preferences are represented by a utility function, preferences satisfying monotonicity (or ...
aliosha karamazov's user avatar
1 vote
1 answer
52 views

Can the following statement be rationalized if it yields a choice function?

A person choose an alternative to maximize another person's suffering. I thought we could define a sort of relation where the person suffers more from x than y. And if we can always do this, we can ...
aliosha karamazov's user avatar
1 vote
1 answer
31 views

Can the following behavior be rationalized if it yields a choice function?

The decision maker has an ideal point in mind and chooses the alternative closest to it. I am not sure if I am right, but in order to rationalize it, we first have to construct a choice function. So, ...
aliosha karamazov's user avatar
3 votes
1 answer
88 views

Challenging question in microeconomics - local nonsatiation

I'm studying advanced micro from the Mas-Colell book (exercise 16.C.1) I was wondering if anyone can help me to solve the following exercise. I have no idea how to deal with it Show that if a ...
Maximilian's user avatar
0 votes
0 answers
255 views

Strict monotonicity and strict convexity - prefences

I've just encountered the following exercise from GEOFFREY A. JEHLE micro's book Strict monotonicity comes from the fact that any increase in $x_1$ or $x_2$ increases utility, and strict convexity ...
Dimitru's user avatar
  • 93
2 votes
2 answers
488 views

Are the indifference curves for bads concave?

While I was studying microeconomics, a question arose: I know what the indifference curve for one “good” good and one “bad” good looks like. But if both goods are bad, is the indifference curve ...
M. Wn's user avatar
  • 21
4 votes
1 answer
103 views

Example of consumer preferences that switches from being concave to being convex

Question Is there an example of consumer preferences over consumption bundles $(x,y)\in \Bbb R^2$ that would be concave when $x$ is abundant relative to $y$ and convex otherwise? Are there known ...
Pavel Kocourek's user avatar
0 votes
0 answers
31 views

Decomposition of preferences into set of CES functions

CES function as a tool Hello everyone, I have this idea: CES function basically tells us what is the elasticity of substitution between two (and more) goods, therefore giving us the exact complement/...
Athaeneus's user avatar
  • 740
2 votes
1 answer
97 views

State dependent preferences vs state independent preferences in utility theory

I am working on changes in preferences and found papers on state-independent preference. What is the difference between state-dependent and state-independent preferences and utility functions? What ...
desi arthshastri's user avatar
0 votes
0 answers
41 views

Which Choice Rule follows Always Chosen axiom and No Binary Cycle axiom?

Source: taken from ISI PhD entrance exam questions.
Pranesh A's user avatar
3 votes
0 answers
35 views

Does consumer demand in the secondhand market actually affect the firsthand market for high-cost goods

In the 21st Century, there is an increasing consumer awareness of the externalities of manufacturing and along with it a stronger consumer preference to buying used goods rather than new. My question ...
gfaster's user avatar
  • 31
1 vote
1 answer
176 views

How to check if a utility function represents locally non-satiated preferences?

I understand the distant definition of LNS but I don't get how to actually apply it to given utility functions like u=x1/x2 or u=x1-x2 or of any form? Is there structured math-y way to check if they ...
reindeer's user avatar
2 votes
1 answer
172 views

How to prove that any preference relation on (countable) X has a utility representation with a range (0,1)?

Theorem: If $X$ is countable, then any preference on $X$ has a utility representation with a range $(0,1)$. The stated proof in Rubinstein's lecture notes: Proof: Let $\{x_n\}$ be an enumeration of ...
homo-economitux's user avatar
2 votes
1 answer
97 views

Can "thick preferences" be represented by a utility function?

From microeconomics, $u$ is strictly quasi-concave if for all $x\ne y\in\mathbb{R}^2_+$ and $t \in (0,1)$, if $u(x)\ge u(y)$, then $u(tx + (1-t)y)>u(y)$. You may also check the figure below. Here ...
Tatanik501's user avatar
0 votes
1 answer
114 views

Is the leontief utility function homogeneous of degree zero? And if that is true, how can that be prove? [closed]

I have not been able to find a mathematical prove is such statement.
Aaba's user avatar
  • 1
2 votes
1 answer
292 views

Shape of indifference curves and quasi-concavity of utility

So my professor told that quasi-concave utilities lead to convex preferences/indifference curves. I have some conceptual problems understanding this statement. Indifference curves are plotted from ...
EconNoob's user avatar

1
2 3 4 5
8