I have a problem and i'm stuck already...
Given a preference relationthat is represented by the utility function u. If
is monotonic, show that
is represtented by
, where
and
, for every
+ (n-dimension positive real numbers)
Can anybody help?
I have a problem and i'm stuck already...
Given a preference relationthat is represented by the utility function u. If
is monotonic, show that
is represtented by
, where
and
, for every
+ (n-dimension positive real numbers)
Can anybody help?
Its not clear if you want to show that any utility function withthat represents the preferences must have the specified properties, or you just want to show that one exists.
Ill assume you only want to show that one exists. The simplest way to do this is to just identify a valid, and show that it represents the preference relation. There are many possibilities, but ill use
.
its clear thatas required.
Now you only have to show thatrepresents your preference relation.
You're told that u represents the preferences, so it must be true that:
You need to show that
But you already know u() represents the preferences, so its sufficient to show thatis the same ordering as u().
ie
This is clearly true as u(0) is constant.
If you want to show rigorously that the above condition is sufficient to show the preferences are represented bythen;
The final property that you must show is thatif
. This is straightforward from the definition of
and the monotonicity of u(x).
u() monotinic:
substitute y=0
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