The Nonconcavity of Money-Metric Utility: A New Formulation and Proof
| Autor: | M. Ali Khan, Edward E. Schlee |
|---|---|
| Rok vydání: | 2016 |
| Předmět: |
Economics and Econometrics
Mathematical optimization Computer Science::Computer Science and Game Theory Concave function 05 social sciences Representation (systemics) TheoryofComputation_GENERAL Connection (mathematics) Salience (neuroscience) Expenditure function If and only if 0502 economics and business Metric (mathematics) Affine transformation 050207 economics Preference relation Mathematical economics Finance 050205 econometrics Mathematics |
| Zdroj: | SSRN Electronic Journal. |
| ISSN: | 1556-5068 |
| DOI: | 10.2139/ssrn.2876141 |
| Popis: | We offer a new, succinct proof of the fact that the money metric utility is concave for any preference relation representable by a concave function if and only if the indirect utility is affine in wealth. Our proof exploits the existence of a least concave representation established in Debreu (1976), and brings into salience the observation that the money-metric utility to be itself a least-concave representation of the preferences if it is concave. This observation is apparently new. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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