There are two additional relations, called indifference and strict preference that can be defined in terms of the preference relation
. Both of these relations inherit the properties of
. In order to prove the existence of a utility function that represents choice, transitivity of the strict preference relation is needed.
Indifference
Two consumption levels x and x' are indifferent if x
x' and if x'
x. This is typically written x
x'.
Indifference is transitive because the relation
that it is derived from is transitive.
Proof: If x
x' and x'
x'', then from the definition of indifference above, x
x' and x'
x'' so that x
x'', and also x''
x' and x'
x so that x''
x. Taken together, this shows that if x
x' and x'
x'' then x
x''.
Strict Preference
Consumption level x is strictly preferred to consumption level x' if x
x' and
x'
x. (The symbol
mean "not".) In words, x is at least as good as x', but x' is not at least as good as x. This leaves only the possibility that x is strictly preferred to x', which we write as x
x'.
Strict preference inherits transitivity from
.
Proof: Let x and x' be such that x
x' and x'
x''. Then the strict preference relation
is transitive if this implies that x
x''.
From the definition of strict preference, x
x' if and only if x
x' and
(x'
x). Similarly, x'
x'' if and only if x'
x'' and
(x''
x'). From x
x' and x'
x'' and transitivity of
we get x
x''. Suppose that x''
x. Since x
x' this would imply, again by transitivity of
, that x''
x'. But x'
x'' which by definition implies that
(x''
x'). This contradicts the assumption that x''
x, so x
x'' and
(x''
x), which is equivalent to x
x''.
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