Paper #794

Title:

Biased representation of homothetic preferences on homogeneous sets

Authors:

Marc Le Menestrel and Bertrand Lemaire

Date:

November 2004

Abstract:

In the homogeneous case of one-dimensional objects, we show that any preference relation that is positive and homothetic can be represented by a quantitative utility function and unique bias. This bias may favor or disfavor the preference for an object. In the first case, preferences are complete but not transitive and an object may be preferred even when its utility is lower. In the second case, preferences are asymmetric and transitive but not negatively transitive and it may not be sufficient for an object to have a greater utility for be preferred. In this manner, the bias reflects the extent to which preferences depart from the maximization of a utility function.

Keywords:

Intransitive preferences, incomplete preferences, irrational behavior, bias, procedural concerns, process of choice

JEL codes:

D000, D110, D210, O220

Area of Research:

Microeconomics

Published in:

Theory and Decision, 60: 207-217, 2006
With the title:
Ratio-scale measurement with intransitivity or incompleteness: the homogeneous case

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