show that welfare function is transitive if there are only two alternatives.
Added by Fernando B.
Step 1
A welfare function is a way to rank different alternatives based on their desirability or utility. Transitivity means that if an individual prefers alternative A over B, and B over C, then they must also prefer A over C. Show more…
Show all steps
Your feedback will help us improve your experience
Akash M and 58 other Microeconomics educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
Akash M.
Assume that choice set X has three elements X={x,y,z}. Consider a Choice Rule defined by a rational preference relation such that: C(X;≳)={x ∈ B | x ≳ y for all y ∈ X} Show that C(X;≳) ≠ ∅. (Hint: Use the properties of rational preferences. First write down the possible relations based on the formal definition of completeness and then generate possible cases using transitivity)
Person 1 cares about both her income and person 2's income. Precisely, the value she attaches to each unit of her own income is the same as the value she attaches to any two units of person 2's income. For example, she is indifferent between a situation in which her income is 1 and person 2's is 0, and one in which her income is 0 and person 2's is 2. How do her preferences order the outcomes (1,4), (2,1), and (3,0), where the first component in each case is her income and the second component is person 2's income? Give a payoff function consistent with these preferences.
Shu N.
Recommended Textbooks
Principles of Economics
Principles of Microeconomics for AP® Courses
Economics
Transcript
Watch the video solution with this free unlock.
EMAIL
PASSWORD