4. Example 1.D.1: Suppose that X = {x,y,z}, B = {{x,y}, {y,z},{x,z}}, C({x,y}_ = {x}, C({y,z}) = {y} and C({x,z})={z} This choice structure satisfies the weak axiom. Nevertheless, we cannot have rationalizing preferences. How do we know if this choice structure satisfies the weak axiom? Given the C({x,y}) = x, C({y,z}), shouldn't C({x,z}) = x? if we have to always make the same choice based on WARP.

4. Example 1.D.1: Suppose that X = {x,y,z}, B = {{x,y}, {y,z},{x,z}}, C({x,y}_ = {x}, C({y,z}) = {y} and C({x,z})={z} This choice structure satisfies the weak axiom. Nevertheless, we cannot have rationalizing preferences. How do we know if this choice structure satisfies the weak axiom? Given the C({x,y}) = x, C({y,z}), shouldn't C({x,z}) = x? if we have to always make the same choice based on WARP.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter13: General Equilibrium And Welfare

Section: Chapter Questions

Problem 13.5P

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