第4章讲义.pptVIP

Chapter Four Utility Structure Utility function (效用函数） Definition Monotonic transformation （单调转换） Examples of utility functions and their indifference curves Marginal utility （边际效用） Marginal rate of substitution 边际替代率 MRS after monotonic transformation Utility Functions A utility function U(x) represents a preference relation if and only if: x’ x” U(x’) U(x”) x’ x” U(x’) U(x”) x’ ~ x” U(x’) = U(x”). Utility Functions Utility is an ordinal (i.e. ordering) concept. [序数效用] E.g. if U(x) = 6 and U(y) = 2 then bu