Chapter2 Preference Orders and Utility Functions for countable sets

http://blog.sina.com.cn/s/blog_642075770100u0np.html

Choices, Values, and Frames

Notations:
$X$ : a countable set, i.e. finite or denumerable.
$\prec$ : strict preference
$\sim$ : the absence of strict preference

Main Theorems:

Theorem 2.1. Let $X$ be a countable set and $\prec$ on $X$ is a weak order, then numbers $u(x),u(y),\cdots$ can be assigned to the elements $x,y,\cdots$ in $X$ in such a way that $x\prec y\iff u(x)<u(y)$ holds.

Theorem 2.2. Let $X$ be a countable set and $\prec$ on $X$ is a strict partial order, then there is a real-valued function $u$ on $X$ such that $x\prec y\iff u(x)<u(y)$ holds.

2.1 Binary Relations

A binary relation on a set $Y$ is a set of ordered pairs $(x,y)$ with $x\in Y$ and $y\in Y$. $xRy$ means $(x,y)\in R$, where $R$ is a binary relation on $Y$.

Some Relations Properties. A binary relation $R$ on a set $Y$ is
$p1.$ reflexive if $xRx$ for all $x\in Y$,
$p2.$ irreflexive if not $xRx$ for all $x\in Y$,
$p3.$ symmetric if $xRy\Rightarrow yRx$ for all $x,y\in Y$,
$p4.$ asymmetric if $xRy\Rightarrow$ not $yRx$ for all $x,y\in Y$,
$p5.$ antisymmetric if $(xRy,yRx)\Rightarrow x=y$ for all $x,y\in Y$,
$p6.$ transitive if $(xRy,yRz)\Rightarrow xRz$ for all $x,y,z\in Y$,
$p7.$ negatively transitive if (not $xRy$, not $yRz$)$\Rightarrow$ not $xRz$ for all $x,y,z\in Y$,
$p8.$ connected or complete if $xRy$ or $yRx$ (possibly both) for all $x,y\in Y$,
$p9.$ weakly connected if $x̸=y\Rightarrow$ ($xRy$ or $yRx$) throughout $Y$. \qquad

Lemma 2.1. $R$ is negatively transitive if and only if for all $x,y,z\in Y$,$xRy\Rightarrow (xRzorzRy)$.

2.2 PREFERENCE AS A WEAK ORDER

DEFINITION 2.1 A binary relation $R$ on a set $Y$ is
(1) a weak order $\iff R$ on $Y$ is asymmetric and negatively transitive;
(2) a strict order $\iff R$ on $Y$ is weakly connected weak order;
(3) an equivalence $\iff R$ on $Y$ is reflexive, symmetric, transitive.

Example: the relation < on real numbers is a weak order and also a strict order, = is an equivalence.

Let R ( x ) = { y : y ∈ Y &ThickSpace; and &ThickSpace; y R x } R(x)=\{y:y\in Y\;\text{and}\; yRx\} R(x)={y:y∈YandyRx}If $R$ is an equivalence, then $R(x)$ is the equivalence classes generated by $x$. In this case $R(x)=R(y)$ if and only if $x=y$. We denote the equivalence classes on $Y$ under $R$ by $Y/R$.

$\prec$ : strict preference, $x\prec y$ read as "$x$ is less preferred than $y$, or $y$ is preferred to $x$"
$\sim$ : the absence of strict preference, $x\sim y\iff (\text{not}x\prec y,\text{not}y\prec x)$
$⪯$: preference-indifference, $x⪯y\iff x\prec y\text{or}x\sim y$

THEOREM 2.1. Suppose $\prec$ on $X$ is a weak order, being asymmetric and negatively transitive. Then
(1) exactly one of $x\prec y,y\prec x,x\sim y$ holds for each $x,y\in X$;
(2) $\prec$ is transitive;
(3) $\sim$ is an equivalence (reflexive, symmetric, transitive);
(4) $(x\prec y,y\sim z)\Rightarrow x\prec z$, and $(x\sim y,y\prec z)\Rightarrow x\prec z$;
(5) with ${\prec }^{\prime }$ on $X/\sim$ (the equivalence classes on $X$ under $\sim$) defined by
$$a{\prec }^{\prime }b\iff x\prec y\text{for some}x\in a\text{and}y\in b(2.4)$$${\prec }^{\prime }$ on $X/\sim$ is a strict order.

THEOREM 2.2. If $\prec$ on $X$ is a weak order and $X/\sim$ is countable then there is a real-valued function $u$ on $X$ such that
$$x\prec y\iff u(x)<u(y)\text{for all}x,y\in X(2.5)$$Outline of the proof. Only consider the case $X/\prec$ is denumerable, and the elements be enumerated as $a_1,a_2,\cdots$. First we define a real-valued function $u$ on $X/\prec$ by induction.
&ThickSpace;&ThickSpace;&ThickSpace; \;\;\; Set $u(a_1)=1$, set $u(a_m)$ as follows:
$\bullet$ If $a_i{\prec }^{\prime }{a}_m$ for all $i<m$, set u ( a m ) = max ⁡ i &lt; m { u ( a i ) } + 1 u(a_m)=\max_{i&lt;m}\{u(a_i)\}+1 u(am​)=maxi<m​{u(ai​)}+1
$\bullet$ If $a_m{\prec }^{\prime }{a}_i$ for all $i<m$, set u ( a m ) = min ⁡ i &lt; m { u ( a i ) } − 1 u(a_m)=\min_{i&lt;m}\{u(a_i)\}-1 u(am​)=mini<m​{u(ai​)}−1
$\bullet$ If $a_i{\prec }^{\prime }{a}_m{\prec }^{\prime }{a}_j$ for some $i,j<m$ and not $(a_i{\prec }^{\prime }{a}_h{\prec }^{\prime }{a}_j)$ for every positive integer $h$ that is less than $m$ and differs from $i$ and $j$. In this case, set $u(a_m)=\frac{u(a_i)+u(a_j)}{2}$.
This formulation can be easily checked by the fact that ${\prec }^{\prime }$ is a strict order on $X/\prec$, and can be extended to $X$ naturally. $\square$

2.3 PREFERENCES AS A STRICT PARTIAL ORDER

DEFINITION 2.2 A binary relation $R$ on a set $Y$ is a strict partial order if and only if it is irreflexive and transitive.
Note that for strict partial order, $\sim$ is not an equivalence. So we define $$x\approx y\iff (x\sim z\iff y\sim z\text{for all}z\in X)(2.6)$$

THEOREM 2.3. Suppose $\prec$ on $X$ is a strict partial order, being irreflexive and transitive. Then
(1) exactly one of $x\prec y,y\prec x,x\approx y,(x\sim y,\text{not}x\approx y)$ holds for each $x,y\in X$;
(2) $\approx$ is an equivalence;
(3) $x\approx y\iff (x\prec z\iff y\prec z\text{and}z\prec x\iff z\prec x\text{for all}z\in X)$
(4) $(x\prec y,y\approx z)\Rightarrow x\prec z$, and $(x\approx y,y\prec z)\Rightarrow x\prec z$;
(5) with ${\prec }^{\ast }$ on $X/\approx$ (the equivalence classes on $X$ under $\approx$) defined by
$$a{\prec }^{\ast }b\iff x\prec y\text{for some}x\in a\text{and}y\in b(2.7)$$${\prec }^{\ast }$ on $X/\approx$ is a strict partial order.

ZORN’s LEMMA. Suppose $P$ on $Y$ a strict partial order and, for any subset $Z$ of $Y$ on which $P$ is a strict order, there is a $y\in Y$ such that $zPy$ for all $z\in Z$. Then there is a $y^{\ast }\in Y$ such that $y^{\ast }Px$ for no $x\in Y$.

THEOREM 2.4 (Szpilrajn, 1930). If ${\prec }^{\ast }$ is a strict partial order on a set $Y$ then there is a strict order ${\prec }^0$ on $Y$ that induces ${\prec }^{\ast }$, so that
$$x{\prec }^{\ast }y\Rightarrow x{\prec }^{0}y\text{for all}x,y\in Y(2.8)$$

THEOREM 2.5. If $\prec$ on $X$ is a strict partial order and $X/\approx$ is countable then there is a real-valued function $u$ on $X$ such that for all $x,y\in X$,$$x\prec y\Rightarrow u(x)<u(y)(2.10)$$$$x\approx y\Rightarrow u(x)=u(y)(2.11)$$

2.4 ORDERED INDIFFERENCE INTERVALS

Some Other Properties.
$p10.(x\prec y,z\prec w)\Rightarrow (x\prec w\text{or}z\prec y)\text{for all}x,y,z,w\in X$.
$p11.(x\prec y,y\prec z)\Rightarrow (x\prec w\text{or}w\prec z)\text{for all}x,y,z,w\in X$.

DEFINITION 2.3. A binary relation is an interval order if it is irreflexive and satisfies $p10$, and a semiorder if it is irreflexive and satisfies $p10$ and $p11$.

For interval orders $(p2,p10)$ we shall use the following:

THEOREM 2.6. If $\prec$ on $X$ is an interval order then each of ${\prec }^1$ and ${\prec }^2$ is a weak order, and $x\approx y\iff (x{=}^{1}y,x{=}^{2}y)$, where $x{=}^{j}y\iff (\text{not}x{\prec }^{j}y,\text{not}y{\prec }^{j}x)$.

THEOREM 2.7. If $\prec$ on $X$ is an interval order and $X/\approx$ is countable then there are real-valued functions $u$ and $\sigma$ on $X$ with $\sigma (x)>0$ for all $x\in X$ such that $$x\prec y\iff u(x)+\sigma (x)<u(y)\text{for all }x,y\in X(2.14)$$

THEOREM 2.8. If $\prec$ on $X$ is a semiorder and we define
$$x{<}^{1}y\iff (x\sim z,z\prec y)\text{for some }z\in X(2.12)$$$$x{<}^{2}y\iff (x\prec z,z\sim y)\text{for some }z\in X(2.13)$$$$x{<}^{0}y\iff x{<}^{1}y\text{or}x{<}^{2}y\text{for all }x,y\in X(2.19)$$Then ${\prec }^0$ on $X$ is a weak order.

THEOREM 2.9. Suppose $\prec$ on $X$ is a semiorder and $X/\approx$ is finite. Then there is a real-valued function $u$ on $X$ such that $$x\prec y\iff u(x)+1<u(y)\text{for all }x,y\in X(2.20)$$