Lecture Notes in Microeconomic Theory: The Economic Agent

Coyright Notice......Page 1
Updates to the Printed Version......Page 2
Title......Page 7
Contents......Page 9
Preface......Page 11
Introduction......Page 13
The Questionnaire Q......Page 19
A Discussion of Transitivity......Page 21
The Questionnaire R......Page 23
The Equivalence of the Two Definitions......Page 24
Summary......Page 26
Bibliographic Notes......Page 27
Problem Set 1......Page 28
The Concept of Utility Representation......Page 30
Existence of a Utility Representation......Page 31
Lexicographic Preferences......Page 33
Continuity of Preferences......Page 34
Debreu’s Theorem......Page 36
Bibliographic Notes......Page 38
Problem Set 2......Page 39
Choice Functions......Page 42
Dutch Book Arguments......Page 43
Rationalizing......Page 44
What Is an Alternative......Page 46
Choice Functions as “Internal Equilibria”......Page 47
The Satisficing Procedure......Page 49
Psychological Motives Not Included within the Framework......Page 50
Bibliographic Notes......Page 54
Problem Set 3......Page 55
Monotonicity......Page 58
Continuity......Page 59
Existence of a Utility Representation......Page 60
Convexity......Page 61
Special Classes of Preferences......Page 63
Differentiable Preferences (and the Use of Derivatives in EconomicTheory)......Page 66
Bibliographic Notes......Page 67
Problem Set 4......Page 68
The Rational Consumer’s Choice from a Budget Set......Page 70
The Consumer’s Problem with Differentiable Preferences......Page 72
The Demand Function......Page 74
Rationalizable Demand Functions......Page 76
The Weak and Strong Axioms of Revealed Preferences......Page 78
Decreasing Demand......Page 80
“The Law of Demand”......Page 82
Bibliographic Notes......Page 83
Problem Set 5......Page 84
Indirect Preferences......Page 86
The Consumer’s Indirect Utility Function......Page 87
Roy’s Equality......Page 88
Dual Problems......Page 89
The Dual Consumer Problem......Page 90
The Hicksian Demand Function......Page 91
Bibliographic Notes......Page 93
Problem Set 6......Page 94
Technology......Page 97
The Production Function......Page 98
The Supply Function......Page 99
Properties of the Supply and Profit Functions......Page 100
Discussion......Page 101
Bibliographic Notes......Page 102
Problem Set 7......Page 103
Lotteries......Page 105
Preferences......Page 106
Von Neumann-Morgenstern Axiomatization......Page 107
Utility Representation......Page 110
The Uniqueness of vNM Utilities......Page 111
The Dutch Book Argument......Page 112
A Discussion of the Plausibility of the vNM Theory......Page 113
Bibliographic Notes......Page 114
Problem Set 8......Page 115
Lotteries with Monetary Prizes......Page 118
First-Order Stochastic Domination......Page 119
Risk Aversion......Page 120
Certainty Equivalence and the Risk Premium......Page 121
The “More Risk Averse” Relation......Page 122
The Coefficient of Absolute Risk Aversion......Page 124
The Doctrine of Consequentialism......Page 125
Invariance to Wealth......Page 127
Critique of the Doctrine of Consequentialism......Page 128
Bibliographic Notes......Page 129
Problem Set 9......Page 130
Aggregation of Orderings......Page 132
Examples......Page 133
Axioms......Page 134
Arrow’s Impossibility Theorem......Page 135
Proof of Arrow’s Impossibility Theorem......Page 136
Bibliographic Notes......Page 138
Problem Set 10......Page 140
Review Problems......Page 142
References......Page 149