Consistent representations of preferences
[EN] Pareto optimal, core, Walrasian, or Nash equilibrium outcomes depend on the preferences of the agents involved. On the other hand, value allocations, the Shapley value, the Nash bargaining solution, and the expected utility are contingent on the payoffs selected from an infinite number of repre...
| Autores: | , |
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| Tipo de recurso: | artículo |
| Estado: | Versión borrador |
| Fecha de publicación: | 2025 |
| País: | España |
| Institución: | Universidad de Salamanca (USAL) |
| Repositorio: | GREDOS. Repositorio Institucional de la Universidad de Salamanca |
| OAI Identifier: | oai:gredos.usal.es:10366/168493 |
| Acceso en línea: | http://hdl.handle.net/10366/168493 |
| Access Level: | acceso embargado |
| Palabra clave: | Preferences Utility function Cardinal representation Welfare functions 5308 Economía General |
| Sumario: | [EN] Pareto optimal, core, Walrasian, or Nash equilibrium outcomes depend on the preferences of the agents involved. On the other hand, value allocations, the Shapley value, the Nash bargaining solution, and the expected utility are contingent on the payoffs selected from an infinite number of representations of each preference. It also holds for risk aversion issues or welfare functions that combine individual utility functions to evaluate economic policies. To avoid inconsistencies and overcome this problem, we follow Kannai (1970) to construct a “canonical” utility representation for each continuous preference. Exploring unique preference representations can lead to a more precise understanding of decision-making processes. This approach can help study economic solutions and policies in scenarios where there is diversity in individ-uals’ preferences, as it facilitates the ranking of consumption bundles, the ordering of transitions between bundles, and interpersonal comparisons. Thus, we provide theo-retical foundations to the implicit assumption of consistency in problems where the solutions depend on utility functions or payoffs. |
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