We construct a complete space of smooth strictly convex preferences defined over commodities and monetary transfers. Our model extends the classical one in that preferences are strictly monotone in monetary transfers, but need not be monotone in all commodities. We thereby provide a natural framework for performing genericity analyses in situations involving inventory costs or decisions under risk. The constructed space of preferences is contractible, which allows for a natural aggregation procedure in collective decision situations.
Smooth Preferences; Nonmonotonicity; Collective choice;
- C60: General
- D11: Consumer Economics: Theory
Economic Theory Bulletin, vol. 7, n. 1, May 2019, pp. 37–57