高级微观经济学PreferenceandChoice教程.ppt

lecture5 for Chu Kechen Honors College * * Advanced Economics(lecture 5: consumption theory I) Ye Jianliang Preference and Choice Content: Preference and rationality The rule of choice Budget Demand function WA and demanded law 2.The rule of choice We can only observe what a man choice under a certain constrain. Is the man’s preference rational when we observed several choice of him? Or if his preference was rational, what rules will his choice take? 2.The rule of choice Choice construct: a choice under certain budget: Budget set: and , is a budget family, represented a limited list of all possible choice under certain system, nature, technology and other social environments that the decision-maker must take. Choice rule: , maybe contain more than one elements. 2.The rule of choice Weak Axiom of Revealed Preference (WARP or WA) : if for certain , and for and , then must Revealed Preference “ ”: 2.The rule of choice Choice set Proposition2: if are rational, then choice construct satisfied WA. Prop.2 indicate that if the decision-maker have rational preference, than his choice satisfied WA. Is his preference rational if his choice is observed satisfy WA? 2.The rule of choice Definition: for , we say “rational preference rationalization Propersition3: if satisfied WA and contain all subsets of X that is ternary and less than ternary. example: X={x,y,z}, B ={{x,y},{y,z},{x,z}}, C({x,y})={x},C({y,z})={y},C({x,z})={z},(B , C(.)) satisfied WARP, but there is no rationalization preference relation over it. 3.Competive budget Consumption set X and it’s price with the wealth w0. Definition: Walras (competive) budget set Proposition4: if X is concave, then is 4.Demand function For any p and w are strictly positive, the correspon